Amid increasing expenses by almost
four times the sales, Aurora Cannabis
Inc (NYSE:ACB) downsizes the workforce and assumes impairment charges of
$752.79 million. The company has cut 500 jobs that include 25% of the corporate
Aurora Cannabis maintains 3,400
employees in 34 nations worldwide. A majority of the announced job cuts are
from the contract workforce. The company expects to save $9 million CAD through
cost-cutting measures. Aurora Cannabis has posted an EBITDA loss of $40 million
CAD in Q1 2020. The company has to post quarterly revenues of $140 million CAD
to reach the breakeven. According to analysts, Aurora Cannabis may reach the
breakeven by Q4 2021.
Singer becomes an interim CEO
Terry Booth, the
present chief executive officer of Aurora Cannabis, will retire, and Michael
Singer will act as an interim CEO. Singer assumed the role of executive
chairman last year. Co-founder, Booth will act as an advisor and continues on
the board. The company is searching for a permanent CEO. Its shares declined by
13% in the after-hours trading.
The net revenues
of Aurora Cannabis in Q2 is expected to be in the range of CAD 50 million and
CAD 54 million. Its revenues in the same period last year are CAD 54.2 million.
made changes to certain credit facilities that include removing some covenants
and options for refinancing at maturity. According to analysts, the company may
not be able to pay the loan of CAD 360 million, which is due in August 2021.
Aurora Cannabis is criticized for aggressive expansion worldwide amid uncertain
demand. The company has not set any timeframe when it will become profitable.
Executive changes at other firms
joins the league of companies (Sundial Growers, Supreme Cannabis, and Canopy
Growth) that made executive change. The change is on the backdrop of
disappointing sales and mounting costs.
An analyst at New
York based O’Neill, Andrew Kessner, said we need not expect a major change from
Singer as an adviser because he is already at the helm of the company. It is
only an indication to the market that the company is making changes.