Aurora Cannabis Inc. is making its second round of significant cuts this year as it continues with a restructuring plan meant to address profitability struggles.
The Edmonton-based cannabis company announced Tuesday that it will reduce its selling, general and administrative workforce by 25 per cent immediately and another 30 per cent of production staff will be laid off from the company over the next two quarters.
“This has not simply been a cost-cutting exercise,” said Michael Singer, Aurora’s executive chairman and interim chief executive.
“We have undertaken a strategic realignment of our operations to protect Aurora’s position as a leader in key global cannabinoid markets, most notably Canada.”
Operations to cease at 5 facilities
On top of layoffs, Aurora has also decided to cease some operations at five facilities — Aurora Prairie in Saskatchewan, Aurora Mountain in Alberta, Aurora Ridge in Ontario and Aurora Vie and Aurora Eau in Quebec — over the next two quarters.
Part of Aurora Vie will remain operational to allow for the manufacturing of certain higher margin items, in line with the company’s decision to focus production and manufacturing at the company’s larger scale and more efficient sites.
By the end of the company’s 2021 second quarter, production and manufacturing at Aurora Sky in Alberta, Aurora River in Ontario, Whistler Pemberton in British Columbia and Polaris in Alberta will be consolidated.
The company will also record production asset impairment charges of up to $60 million during its fourth quarter and a charge of up to $140 million in the carrying value of certain inventory.
Singer expects that these moves will improve gross margins and accelerate Aurora’s ability to generate positive cash flow.
“We believe that we now have the right balance for the long-term success of Aurora — market leadership, financial discipline, operational excellence, and strong execution,” he said.
“We remain focused on making Aurora a profitable and robust global cannabinoid company.”
Cannabis industry struggling
Aurora’s cuts come as the cannabis industry is struggling amid COVID-19, which caused several companies to close their stores to stop the spread of the virus.
Cannabis companies were facing headwinds prior to the pandemic, even as they started rolling out the country’s first legal edibles, beverages and vapes.
Many pot businesses rang in the new year with cuts to staffing and dramatic restructurings that saw facilities close and significant writedowns taken.
In February, Aurora announced it was taking $1 billion in writedowns and would lay off 500 employees as part of a restructuring of its spending plans. The company also said its chief executive Terry Booth was retiring and a search was underway for his successor.
Singer chalked up the moves as being part of retail constraints, evolving consumer demand and provincial distributor inventory management adjustments, but said he remains “extremely bullish” on the long-term potential of the Canadian medical and consumer markets.
Aurora competitor Canopy Growth Corp. was hit with troubles too.
It said in April that it will lay off 85 full-time workers and close its indoor facility in Yorkton, Sask. to align its production in Canada with market conditions.
Canopy also ended farming in Springfield, N.Y., cultivation work at a facility in Colombia and operations in South Africa and Lesotho.
The Canopy cuts came after the company laid off 500 employees, closed some of its greenhouses and took writedowns of between $700 million and $800 million at the start of the year as it dealt with profitability challenges.
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
