- Aurora Cannabis, a Canadian marijuana business, posted an 18% increase in third-quarter revenue on Thursday, as sales surged during the coronavirus pandemic.
- Aurora achieved a greater-than-expected performance during the early months of the coronavirus pandemic even as restrictions to make only essential purchases could mean consumers faced more difficulty in access.
- Despite rising sales, Aurora reported a more than $1 billion loss in the nine months to the end of March.
- Shares bounced on the news, rising more than 14% during Thursday trading, and a further 19% in pre-market trading Friday.
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Canada-based marijuana producer Aurora Cannabis pulled off high sales during the early months of the coronavirus pandemic.
The licensed weed producer in Alberta posted third quarter revenues of $53.4 million (all figures in this post are in US dollars) on Thursday – an 18% jump from the previous quarter – driven by a 24% increase in sales of recreational marijuana, and a 13.5% increase of medical cannabis.
Shares jumped more than 14% on Thursday, and by an additional 19% in pre-market trading Friday, after the results were announced.
Despite coronavirus-related restrictions on inessential purchases and social distancing limitations in pharmacies, the marijuana seller achieved an unexpectedly good quarter.
Chief executive Michael Singer said he was "pleased" with the progress made in the quarter and its commitments to reduce capital expenditures to below $71 million in the second fiscal half of 2020.
While sales increased, the company reported a loss of just over $1 billion in the nine months to the end of March, Marketwatch reported.
The distributor's inexpensive weed sales impacted its cash cost to produce dried cannabis per gram which fell to $0.60, from $0.63 in the previous quarter.
The company noted that its main focus remains on capturing market share for the near term, instead of prioritizing revenue goals.
"The variables associated with the COVID-19 pandemic and the still-developing Canadian consumer market, including consumer buying behaviour and new store rollout, have led Aurora to focus on market share for the near term, rather than revenue targets, to manage the business," Aurora said in a statement.
Although the producer claimed an "improved cash position" of $163 million in the quarter and showed it reduced its negative cash flow by 43%, the company is still burning relatively significant amounts of cash, which might be a warning sign for investors.
