Village Farms Q4 Net Income Drops 96% YoY To $2.1M, Canadian Cannabis Sales Improve Reaching $26.8M

Village Farms International, Inc. VFF reported Tuesday its financial results for the three months and year ended December 31, 2021.

"In the fourth quarter, we once again saw strong year-over-year growth in sales and adjusted EBITDA, with positive adjusted EBITDA contributions from each of our Canadian Cannabis, US Cannabis and Village Farms Fresh (Produce) businesses for the second consecutive quarter," Michael DeGiglio, CEO, Village Farms stated. "Our results were driven by the continued strong performance of our Canadian cannabis operations, with Pure Sunfarms' leading market share in the dried flower category and successful new product introductions, as well as the first partial quarter contribution of Rose LifeScience in Quebec, driving a 50% year-over-year increase in net revenue and 99% increase in adjusted EBITDA."

Gross margin remained at the top end of our target range at 42%. With expanded production capacity and robust product strategy, as well as the significant opportunities created by the acquisition of Quebec-based Rose and anticipated receipt of EU-GMP certification, we believe 2022 promises to take the scale and profitability of our Canadian cannabis operations to a new level."

DeGiglio, added, "The performance of our Canadian cannabis operations throughout 2021 contributed to a year that saw Village Farms overall deliver growth in revenue and adjusted EBITDA of 58% and 89%, respectively, supported by the profitable contribution of Balanced Health Botanicals since its acquisition in August, and the improvement in market pricing for Village Farms Fresh in the second half of the year. "

Q4 Financial Highlights 

• Consolidated net income amounted to $2.1 million, or $0.03 per share, compared to $7.0 million or $0.12 per share in the same period of 2020;
• Consolidated adjusted EBITDA was a gain of $5.3 million, versus a loss of $500,000 in the same quarter of last year;
• Canadian cannabis sales reached $26.8 million, compared to $17.3 million in the third quarter of 2020;
• Canadian cannabis gross margin was 42%, versus 39% in the corresponding quarter of the previous year;
• Canadian cannabis net income hit $3.5 million, compared to $1.1 million in the same period of 2020;
• Canadian cannabis adjusted EBITDA was a gain of $4.9 million, versus $2.4 million in the third quarter of last year;
• Total cannabis sales (Canadian and US) increased 168% year-over-year to $34.4 million, and represented 47% of total consolidated sales, increasing from 27% for the fourth quarter of 2020; 
• Total cannabis adjusted EBITDA increased 183% year-over-year to $6.8 million;

Price Action

Village Farms shares were trading 4.32% higher at $5.56 per share during Tuesday's pre-market session.