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 reported a sharply wider net loss for the second quarter, despite a modest annual increase in revenues. Though the stock dropped early Thursday soon after the announcement, it bounced back when trading started.
Net loss attributable to common shareholders widened to C$1.29 billion or C$1.18 per share in the second quarter from C$237.75 million or C$0.25 per share in the same period of last year.
Net revenues increased 3% year-over-year to C$56.03 million in the second quarter but declined 26% sequentially. Net cannabis revenue, excluding provisions, was C$63.2 million, which is in line with the management’s guidance. Consumer cannabis revenue dropped by 24% sequentially to C$23 million.
Cannabis 2.0 Launch
Aurora has successfully launched its Cannabis 2.0 products across the Canadian market. Michael Singer, the executive chairman, 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.
Outlook
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.
Reorganization
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.
Also see: Aurora Cannabis Q1 Earnings Conference Call Transcript
Aurora Cannabis’ shares dropped during Thursday’s pre-market session, following the earnings release, but regained momentum in the early trading hours.