For Aurora Cannabis, Inc. (NYSE: ACB), the last few months have been momentous, marked by key organizational changes including an executive reshuffle. The medical marijuana company Thursday reported a modest increase in second-quarter net revenues, which, however, decreased sequentially. The stock dropped during the pre-market trading session soon after the announcement.
The Canadian firm did not provide earnings details for the December-quarter. It was widely expected to report a net loss, due to goodwill and impairment charges.
Net revenues increased 3% year-over-year to C$56.03 million in the second quarter but declined 26% sequentially. Consolidated revenue came in at C$66.6 million. Net cannabis revenue, excluding provisions, was C$63.2 million, which is in line with the management’s guidance. Consumer cannabis revenue increased by 11% sequentially.
Cannabis 2.0 Launch
Aurora has successfully launched its Cannabis 2.0 products across the Canadian market. Michael Singer, executive chairman of Aurora, was appointed interim CEO effective February 6, 2020. The management has launched a search for Singer’s successor.
“As announced last week, being a profitable cannabis company for our investors is the singular near-term focus for Aurora and we have begun to implement a business transformation plan where we intend to manage the business with a high degree of fiscal discipline,” said Michael Singer.
During the second quarter, the company produced 30,691 kg of cannabis, down 26% from the preceding quarter. At C$0.88, the cash cost to produce per gram of cannabis remained broadly unchanged quarter-over-quarter. Meanwhile, the average net selling price dropped to C$5.54 per gram from C$5.68 per gram in the previous quarter.
The management reaffirmed its third-quarter outlook for cannabis revenue, excluding provisions, at C$65 million, which is broadly unchanged from the second-quarter levels. The moderate outlook reflects the potential impact of industry headwinds on the top-line.
The company is in the midst of an extensive reorganization, which included the recent departure of chief executive officer Terry Booth. Currently, efforts are on to reduce costs by streamlining operations and reducing the workforce.
Aurora Cannabis’ shares dropped early Thursday, following the earnings release, after closing the previous session lower.