Aurora Cannabis Inc (NYSE: ACB) reported first-quarter sales of CA$70.8 million ($53.4 million) Thursday, down from CA$94.6 million in the fourth quarter.
The cannabis company’s cash cost to produce per gram fell 25% sequentially to CA$0.85 per gram.
Medical cannabis revenue grew 3% sequentially, while consumer cannabis revenue fell 33%, the company said.
The drop in consumer cannabis revenue is due to a slowdown in provincial ordering over the summer as distributors worked through inventories and the industry felt the impact of a “slow pace of retail store licensing” in Canada, Aurora said.
“Aurora has, and will continue to focus on everything in our control. Our success in doing this was demonstrated again this quarter by continued strong improvement in our core KPIs,” CEO Terry Booth said in a statement.
Aurora Pulls Back On Construction
The cannabis company posted an adjusted EBITDA loss of CA$39.7 million, higher than its CA$26.6 million loss in the fourth quarter of 2019, excluding the impact of the CA$14.9 million out-of-period adjustments recognized in the previous quarter.
Production volume increased 43% quarter-over-quarter to 41,436 kgs.
The company said it’s halting construction activity at its Aurora Nordic 2 facility in Denmark, saving CA$80 million over the next year. Aurora also said it’s defering the majority of final construction and commissioning activities at the Aurora Sun facility “for the forseeable future,” saving about CA$110 million in expenses.
“As global demand develops, or as Aurora’s market share in the global cannabis market increases, we will reactivate these projects,” according to the company.
Aurora said it expects to begin shipping Cannabis 2.0 products such as vape pens and edibles beginning in late December.
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Aurora announced several steps to strengthen its balance sheet, including a more than CA$190-million reduction in capital expenditures over the coming quarters and raising more than $124 million in gross equity since the beginning of fiscal 2020 through the company’s at-the-market financing program.
Aurora also announced that all holders of the company’s CA$230-million 5% unsecured convertible debentures due March 9, 2020 have an opportunity to voluntarily convert their debentures at the amended early conversion ratio. The window of opportunity for such conversions is from Nov. 18 to 5 p.m. Toronto time Nov. 20, the company said.
The stock was down 8.81% at $3 at