Earnings Results: Aurora Cannabis says part of its path to profitability is through a vegetable grower

by | Nov 10, 2022 | Stock Market

Aurora Cannabis Inc. on Thursday reported a bigger quarterly loss and lower sales than expected. But the Canadian pot producer stuck with its target of hitting an adjusted measure of profit by the end of next month, and said it would get there, in part, through a company that has little to do with cannabis. Chief Executive Miguel Martin, during Aurora’s
earnings call, said the company was “very close” to hitting that target — for adjusted Ebitda, or earnings before interest, taxes, depreciation and amortization. The figure is the cannabis industry’s preferred, and much more forgiving, profit metric.

But profit expectations for Canada’s weed industry have had to be tempered and pushed back over the past few years. And Aurora, like the rest of the industry, has struggled with overproduction, debt, layoffs, impairments, facility closures and, more recently, inflation and its impact on costs and demand. Still, Chief Financial Officer Glen Ibbott said Aurora could hit that profit goal through cost management, steady gross margins, and a sorting-out of distribution hurdles that would help revive sales. He also said the company would get there through Bevo Farms — a vegetable grower that Aurora acquired a controlling stake in over the summer. Bevo contributed only around C$3.3 million in net sales to Aurora’s fiscal first-quarter results. But with cannabis-industry competition stiff and rising prices for essentials still hurting consumers, other Canadian cannabis producers have leaned on their non-cannabis segments for growth. Tilray …

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