Aurora Cannabis Inc. is halting construction of two production facilities to save over $190 million as part of a plan to strengthen its balance sheet.
The Edmonton-based cannabis producer says it will immediately cease construction of its Aurora Nordic 2 facility in Denmark to save about $80 million over the next year.
The company will also indefinitely defer completion of construction and commissioning at its Aurora Sun facility in Medicine Hat, Alberta to conserve $110 million.
Once completed, the Aurora Sun facility will be the size of 21 football fields and 50 per cent larger than its “Aurora Sky” operation at Edmonton International Airport.
The first planting in Medicine Hat was expected to take place in the first half of 2019, with completion initially slated for the second half of the year.
Once in operation, Aurora said the new facility would boost its total capacity to more than 430,000 kilograms per year.
The construction halts come as the company reported net income of $10.4 million for the quarter ending Sept. 30, compared with net income of $104.2 million for the same quarter last year.
It says net revenue was $75.3 million for its first quarter of fiscal 2020, up from $29.7 million for the same quarter last year, but down from the $94.6 million in the fourth quarter ended in June.
Analysts had expected revenue of $93.31 million, according to financial markets data firm Refinitiv.
‘We will reactivate’
Aurora says it produced 41,436 kilograms in the quarter, up from 29,034 in the last quarter. It will consider restarting development at the two facilities as demand develops.
“With the work completed to date, both the Aurora Nordic 2 and Aurora Sun facilities are now fully enclosed,” reads a company news release.
“The Company expects to have at least six flower rooms completed and in operation at Aurora Sun in 2020, for a total of 238,000 square feet.
“As global demand develops, or as Aurora’s market share in the global cannabis market increases, we will reactivate these projects.”
The company currently operates facilities in Mountain View County, Alta., and in Pointe-Claire on Montreal’s West Island. It is also completing a facility in Lachute, Que.