By COLLIN GALLANT on September 28, 2021.
Aurora Cannabis says cost cutting will drive it to profitability this fall even though its revenue fell in the spring, company officials stated in a year-end financial report Monday that gave no new clues about the future of the Aurora Sun facility.
The cannabis producer announced further facility closures last week and is currently seeking a buyer or someone to lease the huge, unfinished “Sun” facility in northwest Medicine Hat.
The report doesn’t make mention of the 1.6 million square-foot local plant, or include any information about events subsequent to the end of the Aurora fiscal year, which is June 30.
That disclosure typically involves major events that companies are required to share with investors.
“We had a clear path toward positive EBIDTA for the first quarter of 2022 (the fall of 2021), and we’re (improved) our balance sheet to that goal,” said CEO Miguel Martin in a conference call with investors and analysts.
He said the company is now free of term-debt and will complete a program to cut $60 million to $80 million in cost reductions.
Those cuts will lead to profit “in first half of the next fiscal year,” at current revenue levels, he said “and we expect … we’re positioned for top flight growth in 2022.”
Last week the company closed it’s “Aurora Polaris” facility in Edmonton, which was to be a processing facility for CBD products, such as soft drinks and edibles.
The company reiterated a concentration on producing “premium brand” lead cannabis at 25 per cent production level at its Leduc facility (another “Sky” class growing plant) and research located in Comox, B.C.
Construction at Sun was halted in early 2020 during an early round of cost cutting and a capital spending pull back after the sector failed to meet growth targets shortly after the legalization of marijuana in Canada.
Sources have said a potential sale, transfer or lease of the facility – which benefited from millions in waived developer fees from the City of Medicine Hat – could be announced this fall.
That would be two years after its original competition date and the promise it would employ several hundred local workers and draw a huge amount of power on contract from the city’s power plant.
Recently city economic attraction officials stated the original enticement deal could be a net benefit to the city in 2025 at current taxation levels, but that revenue would as much as triple if the site was commercialized.