The Edmonton-based producer reported a $137.4 million net loss, an improvement from the $1.3 billion lost in the prior three months.
Aurora saw net revenue climb 35 per cent to $75.9 million in its latest quarter, topping analyst expectations. The company reported an adjusted EBITDA loss of $50.9 million.
Analysts polled by Bloomberg expected a net loss of $75.9 million on revenue of $66.3 million, and adjusted EBITDA of negative $38.3 million for the fiscal third quarter ended March 31.
Aurora has had a tough year as the company fell short of promised profitability targets, risked breaking debt covenants, and diluted its share count by turning to the market for equity financing. The company debt-heavy balance sheet has been a persistent concern for investors.
Aurora shares have fallen more than 93 per cent over the last 12 months. The company completed a 12-for-one share consolidation on Monday, responding to a delisting threat from the New York Stock Exchange after its stock traded below $1.
“Our focus is to continue to gain market share, and we remain well-positioned to capture more revenue in key categories over time,” interim chief executive officer Michael Singer told analysts Thursday evening.
“Our reset plan was aimed at removing complexity out of our business, and reducing costs to a level that was consistent with where we believe the business to be today.”
Cannabis sales were $69.6 million, an increase of 32 per cent from the prior quarter. Aurora took a $2.9 million write-down on cannabis product returns.
Aurora said it sold 12,729 kilograms of cannabis in the third quarter, up from 9,501 in the prior period. Recreational cannabis sales totalled $38.6 million, compared to $31.1 million sold to medical patients. The company previously predicted cannabis 2.0 products would represent one-fifth of non-medical sales.
The average net selling price for recreational cannabis fell to $4.33 from $4.67. The average net selling price in the medical segment increased to $8.12 for $7.99.
The company said COVID-19 did not materially disrupt the business, but warned the pandemic could have a greater impact in the next quarter.
“I am also pleased that our third quarter 2020 financial results were in-line with our expectations, and that we remain firmly on track with the cost-savings and capex goals we detailed during our business transformation plan in February 2020,” Singer said in a statement Thursday.
The plan involved reducing reducing SG&A costs to $40 to $45 million per quarter bringing capital spending below $100 million. The savings targets were announced alongside the termination of roughly 500 workers, resulting in an estimated savings up to $45 million per quarter by the end of the year.
Aurora reported SG&A expenses of $80.1 million, a reduction of $24.7 million from the prior quarter. The company said capital expenses in Q3 were roughly $73.7 million. The company said it has $230.2 million in cash on its balance sheet and has lowered cash burn to about $143 million, from about $265 million in the prior quarter. Debt narrowed to $592.7 million from $644.8 million a year earlier.
Aurora said it no longer considers its hemp production and food businesses core to the company’s future, and announced it has agreements to divest from hemp-related assets in Canada and Europe.
Singer provided an updated on the company’s search for new leadership. His predecessor Terry Booth retired from the CEO role in February. Chief corporate officer Cam Battley, whom many regarded as the de-facto face of Aurora, abruptly left the company last December.
“As announced back in February, the board engaged a global search firm and launched a comprehensive search process. I can confirm today but this process has advanced nicely,” he said on the call. “We remain on track with both the selection and announcement of a new permanent CEO in the next few months.”
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.