Aurora Cannabis (ACB) - Get Report shares fell Tuesday after reporting what could be a nearly C$2 billion impairment charge while also announcing the appointment of Miguel Martin as its new chief executive.
"Material progress has been made to optimize our Canadian operations and put Aurora on a much stronger footing," Martin said. "With market leading brands and a culture rooted in innovation and science, I now feel even more confident in the opportunity to create a global leader in a rapidly growing industry."
Martin replaces interim CEO Michael Singer, who will stay on as executive chairman. Martin was appointed chief commercial officer of Aurora Cannabis in July.
Aurora expects fourth-quarter revenue between C$70 million and C$72 million, including between C$66 million and C$68 million in cannabis net revenue. That is a decline from the C$69.6 million it reported in the third quarter of 2020.
However, the company also expects to record between C$1.6 billion and C$1.8 billion in goodwill impairment charges in the fourth quarter.
Those charges include previously announced fixed asset impairment charges that are now expected to be up to $90 million and a charge of about C$140 million in the carrying value of certain inventory.
Aurora said that while its business prospects remain strong, international financial reporting standards dictate that the company take into account the impact of overall industry risk when assessing the fair value of its inventory.
Separately, Aurora also announced that it has mutually agreed to terminate its short-lived partnership with mixed martial arts league UFC.
The two entities agreed to a research collaboration in spring 2019 where UFC's sports performance team would work with Aurora to see whether CBD products have any benefits for MMA fighters.
Aurora shares were down 7.3% to $7.90 on Tuesday.