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OPERATIONAL EFFIECIENCY TO THE RESCUE...

Aurora Cannabis to focus on operational efficiency as Q4 consumer cannabis sales decline

Sep. 27, 2021 5:29 PM ETAurora Cannabis Inc. (ACB)By: Dulan Lokuwithana, SA News Editor2 Comments

Aurora Cannabis (NASDAQ:ACB) fell as much as ~3.1% in the post-market after the company reported sequentially flat total cannabis net revenue for Q4 fiscal 2021, driven by a decline in consumer cannabis sales.

While total cannabis sales rose ~19% YoY to $54.8M, the consumer cannabis net revenue dropped ~45% YoY to $19.5M.

However, medical cannabis net revenue grew ~9% YoY to $35M, and adj. gross margin stood at ~54% compared to ~49% in the previous year and ~44% in Q3 FY21.

Indicating the shift towards the medical business, the average net selling price per gram of dried cannabis jumped to $5.11 from $3.60 from the prior year’s quarter.

To consolidate its balance sheet strength and improve working capital, the company announced a plan for operational efficiency targeting $60M to $80M in cash savings.

The program will target $30M to $40M of annualized cash savings within the next year and the rest by the end of Q2 fiscal 2023. While 60% of savings are expected from the network through a range of measures including the asset consolidation, the remainder will be realized through savings on SG&A expenses.

Compared to $162.2M in the previous year-end, Aurora (ACB) reported a cash balance of $440.9M as of Q4 FY21.
The savings from operational efficiencies will be incremental to the $300M cost savings realized since the announcement of the business transformation plan in February 2020.