Aurora Cannabis Inc.'s chief executive insisted his company was on track to meet its profitability target even as it recorded a $51.9 million net loss and saw consumer pot net revenue fall 28 per cent from a year ago.
"This will be an incredible achievement, which will also be sustainable," said Miguel Martin, on a Thursday call with analysts.
"We look forward to demonstrating consistent financial performance in the coming quarters."
His Edmonton-based cannabis company has said it will reach profitability based on adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) by Dec. 31.
The company's adjusted EBITDA loss for its first quarter, the period ended Sept. 30, totalled $8.7 million compared with $11 million a year ago.
Aurora's path to profitability has involved a restructuring and several rounds of layoffs and facility closures over the last three years as it contended with shifting COVID-19 measures and grappled with aligning supply with demand.
Also making profitability tough is the extreme level of competition in the cannabis market, which has included a soaring number of cannabis stores in Ontario and licensed producers relying on promotions and price reductions to draw in customers.
The average price for cannabis was $11.78 per gram at the start of 2019, shortly after legalization, but fell to $7.50 per gram in 2021, a November report from Deloitte Canada and cannabis research firms Hifyre and BDSA said.
The average price for vape cartridges has similarly fallen by 41 per cent from $32.02 per gram around legalization to $19 per gram a year later.
"The (recreational cannabis) business is really challenging right now," said Martin. "The pricing continues to drop."
While competitors slash prices to compete in the frenzied market, there are also pressures from high inflation rates and packaging costs, which he characterized as "challenging."
Supply and ordering disruptions have loomed too because of a cyberattack at the Ontario Cannabis Store and store closures due to an employee strike across B.C. cannabis shops.
"Thankfully those issues are now fully resolved," said Martin.
The incidents were partially offset by earnings from Thrive, a premium pot company Aurora bought in March to help it reach its profitability goal and cater to more sophisticated customers looking for higher-end products.
Also aiding the company was its August purchase of Bevo Agtech Inc., a supplier of vegetable seedlings and flowers.
Aurora intends to amp up production at the company by converting one of its previous pot facilities, Aurora Sky, for orchid and vegetable propagation with "minimal capital investment," Martin said.
His remarks came as Aurora recorded a $51.9 million net loss in its first quarter compared with a net loss of $11.9 million for the same period in the prior year.
Its consumer cannabis net revenue for the period ended Sept. 30 amounted to $13.7 million, up from $12.6 million in its prior quarter, but down 28 per cent from $19.1 million in the first quarter of last year.
This report by The Canadian Press was first published Nov. 10, 2022.
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Tara Deschamps, The Canadian Press
