May 21, 2024  ⦿  

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Aurora Sets Sights on European Expansion and 2023 Profit

Despite quarterly and annual losses, Aurora Cannabis is optimistic about achieving profitability in early 2023, fueled by its robust presence in the European medical cannabis market.

Aurora’s financial report for the fourth quarter ending June 30, 2022, showed a net loss of CA$618.7 million, contributing to a yearly loss of CA$1.7 billion. Impairment charges were a major factor behind these losses.

Steady Growth in European Medical Cannabis Share

While overall sales met analysts’ expectations, the medical cannabis sector continued to thrive. In the fourth quarter, Aurora generated CA$36.6 million in net revenue from medical cannabis, marking a 4% year-over-year increase. The medical segment accounted for 73% of fourth-quarter sales.

As Aurora transitions away from the competitive recreational marijuana market, its share of recreational cannabis revenue has declined. In the fourth quarter, adult-use sales represented 25% of revenue, down from 36% in the same period the previous year.

A Global Leader in Medical Cannabis

Aurora aspires to become the world’s leader in medical cannabis, emphasizing its strong performance in the medical sector. The company aims to leverage this segment for future profitability.

Aurora’s international cannabis sales increased by 82%, with a significant portion of that growth occurring in the European Union. Europe has become a pivotal market, accounting for 28% of Aurora’s annual net revenue in fiscal 2022, up from 13% in 2021.

The CEO, Miguel Martin, acknowledged approximately CA$3 million in losses due to wholesale disruptions in British Columbia and Ontario, emphasizing the impact on Aurora’s operations. As of June 30, 2022, Aurora held CA$488.8 million in cash, reflecting its financial stability despite the losses.

Aurora Cannabis trades as ACB on the Toronto Stock Exchange and the Nasdaq. Notably, the company was recently removed from the S&P/TSX Composite Index.

Embracing European Cannabis Potential

With a focus on the flourishing European medical cannabis market, Aurora Cannabis aims to steer its path towards profitability in 2023, driven by steady growth and international expansion.

Aurora Cannabis’s remarkable success in the European medical cannabis sector underlines the company’s strategic shift towards this segment. The substantial year-over-year increase in net revenue from medical cannabis demonstrates the viability of this approach. With a strong presence in Europe and continuous growth, Aurora is poised to harness the continent’s untapped potential for medical cannabis.

Aurora’s vision of becoming the global leader in medical cannabis aligns with its robust performance and ambitions. The medical cannabis market offers promising margins and significant growth opportunities. By focusing on the medical segment, Aurora aims to drive profitability while maintaining a leadership position in the rapidly evolving cannabis industry.

Despite the reported losses, Aurora Cannabis remains financially resilient, supported by its cash reserves of CA$488.8 million as of June 30, 2022. This stability enables the company to navigate challenges and invest in its strategic expansion into the European market, setting the stage for potential profitability in early 2023.


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