Canadian pot producer Aurora Cannabis has lost 74% of its value in the last 12 months.
Aurora Cannabis Inc. late Thursday said that Chief Executive Terry Booth is retiring amid “sweeping changes” for the Canadian licensed producer, the latest pot company to cut costs amid a cash crunch in the sector.
Aurora also detailed preliminary second-quarter fiscal 2020 financial results, saying it expects cannabis revenues between C$62 million and C$66 million for the quarter, net of excise taxes. That would be a sequential decline from net cannabis revenue of C$70.8 million; analysts on average were expecting total net revenue of C$78.8 million, according to FactSet.
Aurora Chief Financial Officer Glen Ibbott said in the statement that the assets impaired are primarily in South America and Denmark, and the company’s “core Canadian cannabis assets are not impacted by these noncash asset impairment charges.” Aurora said it expects “record provisions” for returns, price reductions and future provisions of approximately C$12 million, almost all of which relates to product sold in previous quarters. Aurora said it expects to keep expenses between C$40 million and C$45 million a quarter by the end of fiscal fourth-quarter 2020. Aurora is expected to report full fiscal second-quarter results on Feb. 13.
“These combined changes are consistent with, and evidence of Aurora’s commitment to, achieving positive Ebitda and cash flow as rapidly as possible, while still maintaining the ability to capitalize on longer-term Canadian and global cannabis market opportunities,” the company said. Like its rivals, Aurora has struggled to become profitable following a rocky rollout for legal cannabis in Canada, with red tape hampering the creation of a network of retail stores and allowing the black market to thrive.With companies unable to get their product to customers, revenue numbers have disappointed investors and cash piles have dwindled, forcing companies into some desperate measures to raise capital.
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