Village Farms Reports Revenue Growth in Q1 2024

The TDR Three Key Takeaways regarding Village Farms and Revenue Growth:

  1. Village Farms reports a 21% revenue increase to $78.07 million in Q1.
  2. Canadian cannabis sales surge by 49% at Village Farms.
  3. New RNG project boosts Village Farms’ sustainability efforts.

Village Farms International, Inc. (VFF)  reported yesterday its financial results for the first quarter of 2024, ending March 31. The company revealed significant growth in revenue and improvements in profitability. Village Farms International recorded a net loss per share of $0.03, which did not meet the expected $0.01 loss but exceeded revenue forecasts with a total of $78.07 million. This figure surpassed expectations by $7.51 million and marked a 21% year-over-year increase from $64.7 million. Additionally, adjusted EBITDA rose substantially to $3.6 million from the previous year’s $0.5 million.

In the Canadian market, Village Farms International’s cannabis operations thrived, showing a 49% increase in net sales to $37.4 million. Retail branded sales in this segment grew organically by 28%, while non-branded wholesale sales surged impressively by 181%. Adjusted EBITDA for this sector improved slightly to $4.1 million from $3.9 million. Michael DeGiglio, President, and CEO of Village Farms International, highlighted the company’s focus: “We really focused. Our goal is to be number one in the Canadian market, a position we worked hard to reach with a business model we believe is durable and sustainable.”

Conversely, the U.S. cannabis operations faced challenges, with net sales decreasing to $4.5 million from $5.0 million. The net loss in this segment widened to $0.7 million, and adjusted EBITDA worsened to negative $0.6 million from negative $0.2 million. Discussing the broader U.S. market strategy, Michael DeGiglio stated, “The only reason we’re not active in the U.S., although we are primarily an American company, is because of our NASDAQ listing, which is very important for us and our shareholders.”

The Fresh Produce segment of Village Farms International reported a positive development, with sales increasing by 4% to $36.1 million from $34.6 million. This segment returned to profitability, with a net income of $0.1 million, a significant recovery from a net loss of $2.6 million in the previous year. Adjusted EBITDA in this segment improved dramatically to $2.0 million from negative $1.0 million. Michael DeGiglio emphasized the company’s commitment regarding new sustainability projects: “With our established success and profitability in Canada, Village Farms International is exceptionally well-placed to utilize its cannabis expertise in emerging markets worldwide, including the U.S.”

Further demonstrating its innovative edge, Village Farms International launched new high-potency cannabis products, such as the Hi-Def Pre-Rolls, which have performed beyond expectations. 

The company also emphasized its commitment to sustainability with the recent initiation of its Renewable Natural Gas Project in British Columbia, which started contributing to its profitability from April 2024. The facility, developed in collaboration with Atlanta-based Terreva Renewables, signifies a strategic shift for Village Farms’ subsidiary, Village Farms Clean Energy, Inc., towards a sustainable business model utilizing advanced technology. This project processes landfill methane gas into RNG, which is then sold under a long-term contract, providing Village Farms Clean Energy with royalty income.

Highlighting the dual benefits of the project, Michael DeGiglio, CEO of Village Farms, stated, “We are proud to contribute to environmental sustainability, while at the same time transitioning Village Farms Clean Energy’s model to one that will generate incremental cash flow, profitability and value for our shareholders, beginning immediately.” Echoing this sentiment, Jason Byars, Senior Vice President & General Manager of Terreva, expressed enthusiasm about the facility’s role in regional clean energy supply: “We are thrilled to start up operation of this transformative facility and, in partnership with Village Farms, begin supplying British Columbia with RNG.”

The project is positioned to make a significant environmental impact as part of British Columbia’s 30BY30 plan, which aims to reduce greenhouse gas emissions by 30% by 2030 toward a goal of net-zero emissions by 2050. The article notes, “The Delta RNG Project’s output is expected to provide nearly 3% of British Columbia’s targeted RNG volumes,” illustrating its crucial role in the province’s environmental strategy.

Village Farms International has shown promising progress with a significant increase in first quarter revenue and the introduction of new projects, positioning it well for future expansion in terms of sustainability initiatives and cannabis products. We will continue to monitor their developments and provide updates on their ongoing progress. Want to keep up to date with all of TDR’s research and news, subscribe to our daily Baked In newsletter.

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