Aurora shares rise after posting 260% surge in first-quarter revenue
Shares in Aurora Cannabis Inc. rose in early trading Monday after the company reported its revenue more than tripled in its fiscal first quarter, while marketing costs surged as the pot producer prepared for the launch of the legal recreational market in Canada.
Aurora’s revenue in the three months ending on Sept. 30 hit $29.7 million, marking a 260-per-cent surge from the previous year. Net income, meanwhile, skyrocketed 2,826 per cent to $104.2 million, up a staggering 2,826 per cent compared to the same quarter a year earlier.
The gain in net income was mostly attributed to derivatives and marketable securities, including its minority position in The Green Organic Dutchman, a Hamilton-based pot producer whose valuation rose 108 per cent during the reported quarter.
Aurora shares opened up seven per cent on the Toronto Stock Exchange on Monday morning following the Edmonton-based marijuana producer’s quarterly results. Its shares have increased by 62 per cent over the past year.
Revenue from adult recreational sales were about $553,000, or about two per cent of the company’s total, reflecting the small amount of cannabis Aurora shipped to provinces in the final days of September. Recreational cannabis was legalized in Canada on Oct. 17, more than two weeks after Aurora’s quarter ended.
And Aurora said on Monday its sales and marketing expenses nearly doubled to $29.4 million from $14.8 million in the prior quarter.
“A significant portion of our Q1 2019 marketing spend was in preparation for the adult consumer use market with numerous branding and market awareness initiatives. With more restrictive marketing regulations in effect as of October 17th, we will see a significant reduction in average marketing spend over the remainder of the fiscal year,” said CFO Glen Ibbott in a release.
While Aurora ramped up spending in the quarter to prepare the debut of legal recreational pot consumption, the country’s medical market was a major growth driver in the latest quarter, with the company’s active registered patients rising 250 per cent year-over-year to 67,484.
As some pot retailers have complained about poor inventory levels in the initial days of marijuana legalization in Canada, Aurora said it now has six production facilities with sales licenses awarded to them by Health Canada and will be capable of producing 150,000 kg of pot annually by the end of the year.
Meanwhile, Aurora’s production cash costs fell 22 per cent year-over-year to $1.45 per gram.
Aurora is the first cannabis producer to report earnings this week with Tilray Inc. and Cronos Group posting their quarterly results on Tuesday. Canopy Growth Corp. reports their latest quarter on Wednesday.
Source: BNN Bloomberg
https://www.bnnbloomberg.ca/aurora-shares-rise-after-posting-260-surge-in-first-quarter-revenue-1.1166599
