Village Farms third quarter results

November 13, 2017
Written by
Nov. 13, 2017, Vancouver — Village Farms International, Inc. announced its financial results for the third quarter and nine-month periods ended Sept. 30, 2017.

Highlights for the Third Quarter of 2017:
(Note amounts in U.S. Dollars unless otherwise indicated):
    •    Sales increased 6 per cent to $44.7 million from $42.0 million for the third quarter of 2016.
    •    EBITDA increased by 78 per cent to $1.0 million from $0.5 million for the third quarter of 2016.
    •    Net income was $0.3 million, or $0.01 per share, compared with a net (loss) of ($1.4 million), or ($0.04) per share, for the third quarter of 2016.

Cannabis Joint Venture (Pure Sunfarms) Update:
    •    On Sept. 14, 2017, the application for a "second site" cultivation license under the Access to Cannabis for Medical Purposes Regulations (ACMPR) for Pure Sunfarms Corp.'s ("Pure Sunfarms") Delta facility was submitted to Health Canada. That application was subsequently accepted for review by Health Canada on September 18, 2017; and,
    •    Pure Sunfarms commenced physical conversion of the 1.1 million square foot greenhouse facility in Delta, British Columbia and expects to complete conversion of the first 250,000 square foot quadrant in February 2018 such that, subject to the receipt of cultivation and sales licenses from Health Canada, it expects to begin selling dried cannabis on or before July 2018 and to have all four quadrants commercially producing in the fourth quarter of 2019.

"Our cannabis joint venture, Pure Sunfarms, is making rapid progress towards commercial production at its 1.1 million square foot greenhouse facility in Delta, British Columbia," said Michael DeGiglio, Chief Executive Officer, Village Farms International, Inc. 

"In September, the application for a "second site" cultivation license for the Delta facility was submitted to Health Canada and quickly accepted for review. Physical conversion of the greenhouse facility is now underway and progressing on schedule, such that completion of the first 250,000 square foot quadrant is targeted for February 2018. Subject to the receipt of cultivation and sales licenses from Health Canada, Pure Sunfarms expects to begin selling dried cannabis in July 2018."

"Cannabis production is a significantly more profitable use of the Delta 3 greenhouse operations," added Mr. DeGiglio. "Using conservative market pricing and yield assumptions, we estimate cannabis production at the Pure Sunfarms facility, which equates to approximately 10 per cent of Village Farms' total growing area, will generate more revenue than our Company currently generates – and at EBITDA margins in excess of 50 per cent. We remain confident in the Pure Sunfarms' ability to ramp to 75,000 kg of production in 2020 and, at full production achieve a cost of production including depreciation of less than $1 per gram."

"Our incumbent produce business performed well in the third quarter, highlighted by a 6 per cent year-over-year increase in revenue, 78 per cent year-over-year growth in EBITDA and positive net income, despite continued pricing pressures on commoditized tomato varieties. We continue to benefit from our focus on cost of production per pound, which was 6 per cent lower at the company's facilities than for the third quarter last year, and marked our sixth quarter of improvement in the last seven."

ABOUT VILLAGE FARMS INTERNATIONAL

Village Farms International, Inc. is one of the largest and longest-operating vertically integrated greenhouse growers in North America and the only publicly traded greenhouse produce company in Canada.

With more than 750 years of accumulated master grower experience coupled with advanced proprietary technology and environmentally sustainable growing practices, Village Farms is highly resource efficient. Village Farms produces and distributes fresh, premium-quality produce with consistency 365-days a year to national grocers in the U.S. and Canada from its large-scale Controlled Environment Agriculture (CEA) greenhouses in British Columbia and Texas, as well as from its partner greenhouses in B.C., Ontario and Mexico.

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