Aurora Cannabis Q2 Revenue Falls 10%; Loss Shrinks

Aurora Cannabis (TSE: ACB) (NASDAQ: ACB) total revenue declined in the second quarter of 2022 due to lower recreational cannabis sales.

Aurora Cannabis is one of the world’s largest cannabis companies, serving both the recreational and the medical cannabis market. 

Revenue & Earnings

Total net revenue for Q2 2022 came in at C$60.6 million, down 10% year-over-year. Aurora’s medical cannabis revenue increased 18% to C$45.7 million. Consumer cannabis net revenue amounted to C$14.8 million, down 48% from the same period a year ago. 

The average net selling price of cannabis excluding bulk sales decreased by 6% from C$4.45 to C$4.20 per gram in the second quarter.

Aurora reported an adjusted EBITDA loss of C$9 million in Q2 2022, an improvement compared to an adjusted EBITDA loss of C$11.2 million in Q2 2021. 

Aurora’s transformation plan is ahead of schedule, with approximately C$60 million annualized savings implemented to date. The company now expects to realize total cost savings of between C$60 million and C$80 million by the first half of 2023.

CEO Commentary

Aurora Cannabis CEO Miguel Martin said, “During the second quarter, we improved our Adjusted EBITDA by $2.5 million over Q1, moving us closer to our profitability goal. Our focus remains on further cost reductions, and we are pleased to announce today that we expect to reach the high end of the C$60 to C$80 million range. Our balance sheet remains among the strongest in the industry, with approximately $445 million in cash as of yesterday. This gives us significant working capital to support organic growth and positions us to pursue strategic M&A opportunities.”

Wall Street’s Take 

Following the results, MKM Partners analyst William Kirk kept a Hold rating on ACB with a C$6.50 price target. This implies 12.5% upside potential. 

The rest of the Street is neutral on ACB with a Hold consensus rating based on three Holds and one Sell. The average Aurora Cannabis price target of C$6.86 implies 18.8% upside potential to current levels. 

TipRanks’ Smart Score

Aurora Cannabis scores a 1 out of 10 on TipRanks’ Smart Score rating system, indicating that its stock has a good chance of performing worse than the overall market.

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