Village Farms Reports Record Q1 Canadian Cannabis Sales Following 49% YoY Increase, Continues To Strengthen International Presence

Village Farms International, Inc. VFF reported its financial results on Wednesday for the first quarter ended March 31, 2024, revealing a new record with Canadian cannabis sales increasing 49% year-over-year to $37.4 million.

"The first quarter was an especially strong start to 2024," said Michael DeGiglio, president and CEO of the company. "Our success in quality, innovation and brand building, together with the support of our provincial boards and retail partners, are driving these results as we delight our consumers."

Village Farms gained EU GMP certification from the District Government of Dusseldorf in 2022 and began shipping its best-selling Canadian strains to Germany in the second quarter of 2023.

DeGiglio, who has spoken at previous Benzinga Cannabis Capital Conferences, recently celebrated Germany's historic step towards cannabis legalization. Approvals from both the German Bundesrat and Bundestag legalized the possession of marijuana as of April 1.

The 19th Benzinga Cannabis Capital Conference, is returning to Chicago this Oct. 8-9. Get your tickets now before prices surge by following this link.

"The German cannabis market is already core to Village Farms’ international cannabis strategy and, along with our participation in the Netherlands’ legal recreational cannabis program, central to our focus on legal cannabis opportunities in Europe,” DeGiglio said earlier this year.

On Wednesday, DeGiglio provided an update on Village Farms’ international cannabis operations.

"In our International cannabis business, we are on target to start production in our first facility in the Netherlands this year as the only North American company with a license participating in the first major legal recreational cannabis market in Europe," he said.

Q1 2024 Financial Highlights

• Consolidated total sales amounted to roughly $78.1 million, up from $64.6 million in the prior year's period.
• Consolidated gross profit totaled $15.5 million, up from $12.3 million in the first quarter of fiscal 2023.
• Consolidated selling, general and administrative expenses amounted to $16.4 million, down from $17.4 million in the prior year's period.
• Consolidated net loss improved to $2.9 million, down from $6.6 million in the prior year's period.
• Consolidated adjusted EBITDA (a non-GAAP measure) improved to $3.6 million from $0.5 million.
• Consolidated cash used improved to $3.6 million from cash used of $10.1 million – excluding net equity financing proceeds – with break-even cash from operations compared with cash used in operations of $3.7 million.

Canadian Cannabis (Pure Sunfarms and Rose LifeScience)

• Net sales increased 49% to $37.4 million from $25.1 million in the prior year’s period.
• Retail branded sales increased 28%, international (export) sales decreased 13%, non-branded (wholesale) sales increased 181% year-over-year.
• Gross margin was 25% compared with 34% in the first quarter of fiscal 2023.
• Net income increased to $0.8 million from a net loss of $0.1 million in the prior year’s period.
• Adjusted EBITDA increased to $4.1 million from $3.9 million in the corresponding period of last year.

U.S. Cannabis (Balanced Health Botanicals)

• Net sales were $4.5 million compared with $5 in the prior year’s period.
• Gross margin was 59% compared with 65% in the corresponding quarter of fiscal 2023.
• Net loss was $0.7 million compared with a net loss of $0.4 million in the prior year’s period.
• Adjusted EBITDA came in negative at $0.6 million compared with a $0.2 million adjusted EBITDA loss in the prior year’s period.

Village Farms Fresh (Produce)

• Sales increased 4% to $36.1 million from $34.6 million in the prior year’s period.
• Net income improved to $0.1 million from a net loss of $2.6 million in the first quarter of fiscal 2023.
• Adjusted EBITDA improved to $2 million from a negative adjusted EBITDA of $1 million in the prior year’s period.

VFF Price Action

Village Farms' shares traded 2.92% higher at $1.235 per share during the pre-market session on Wednesday morning.