Aurora focuses on developing low cost production in Canada

Ongoing growth and high gross margins in Aurora’s fourth quarter support long-term profitability

Kristoffer Inton 12 September, 2019 | 2:51PM

On Sept. 11, 2019, Aurora Cannabis (ACB) reported results for fiscal 2019, highlighted by strong sales growth but continued profit losses. However, we’d expect such results from a young company in the budding cannabis industry.

Aurora’s focus on production showed, as 2019 kilograms produced and sold increased 920% and 629% year over year to 57,442 kg and 36,628 kg, respectively, from fiscal 2018. The company's focus on optimization resulted in gross margins of 58% in the fourth quarter, notably higher than other cannabis companies under our coverage. The improvement in gross profit margin was driven by its 20% decrease in production cost to US$1.14 per gram during the quarter, down from US$1.42 in the third quarter.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Aurora Cannabis Inc16.33 CAD1.81

About Author

Kristoffer Inton

Kristoffer Inton  Kristoffer Inton is an equity analyst for Morningstar, covering gold, coal and cement companies. Before joining Morningstar in 2013, he was an investment banking associate for Guggenheim Securities in New York. He holds a bachelor’s degree in finance with high honours from the University of Illinois.

© Copyright 2020 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies