Aurora posts $1B loss, plans to close some facilities
Aurora Cannabis Inc. reported several impairment charges and a more than $1-billion net loss in its most recent quarter Thursday as it revealed plans to close several facilities and cope with pricing pressures that ate into revenue already hampered by the COVID-19 pandemic.
The third-quarter loss the Edmonton-based cannabis business reported was up from a more than $160 million loss in the same quarter last year and was coupled with $741.7 million in goodwill impairment charges and $176.1 million in impairment related to property, plants and equipment.
Many of those charges are linked to facilities Aurora said it will cull from its portfolio this year and next in an effort to create “a leaner, more agile organization.”
The company said Thursday it had deemed its Aurora Sky facility in Edmonton, where 13 per cent of its global workforce is employed, and its Aurora Anandia and Whistler Alpha Lake sites “redundant.” Aurora Anandia and Whistler Alpha Lake are expected to close by the fourth quarter of the year and Aurora Sky will close by the third quarter of 2023.
The three facilities employ 16 per cent of the company’s workforce, said Aurora spokesperson Kate Hillyar in an email to The Canadian Press. She declined to share the total workforce size.
The company’s latest quarter was also weighed down by excess inventory, older products and fierce competition, Miguel Martin, Aurora’s chief executive, said on a call with analysts.
Aurora’s loss encompasses a period leading up to the reopening of many businesses that were closed or introduced increased health and safety measures when a spike in COVID-19 cases materialized in Canada.
While many cannabis stores remained open, they reported lower traffic and sales, often impacting licensed producers.
Many cannabis companies have coped by paring down grow sites and other manufacturing facilities.
Recently, Aurora announced it will wind down operations at an outdoor grow site in the B.C. Interior because it recently acquired Thrive Cannabis, which has indoor and outdoor grow facilities. The company told The Canadian Press about 10 people are affected by its closure.
More will be affected at Aurora Sky, which was meant to be an almost completely automated facility that would grow mid-tier flower, but the consumer “evolved” and developed more nuanced tastes that did not lend themselves to automation, said Martin.
Sky had to be retrofitted retroactively, but the needs and scale became “a bit of an impediment,” and eventually the company was losing a “significant” amount of money on the facility.
“It just didn’t make sense,” he said, noting closing Sky will save the company $7 million per quarter.