Village Farms International, Inc. (NASDAQ: VFF) reported a wider net loss for the third quarter of 2019, reversing the positive momentum seen since the beginning of the year, due to a decline in produce sales and increase in expenses. The company’s stock closed Thursday’s regular trading at $6.80, down 4%.
The Canada-based greenhouse vegetable producer reported a net loss of $5.07 million or $0.10 per share for the quarter, compared to a loss of $1.99 million or $0.04 per share in the same period of 2018.
Loss Widens
Net loss before tax was $6.5 million, which included a loss of $0.9 million from Canadian joint venture Pure Sunfarms, compared to a net loss before tax of $2.7 million last year.
Produce sales declined 3.5% annually to $38.29 million. Consolidated sales, including joint ventures, were $47.3 million, up 19% year-over-year.
“In our produce business, we continue to make steady progress in the transition of the production displaced for cannabis and hemp production to third-party growing partners, recently adding approximately 120 acres with partners in Mexico and Canada to bring the total to nearly 300 acres. During this period of transition, we will continue to experience some impact on our financial results,” said CEO Michael DeGiglio.
Stock Offering
After the end of the quarter, Village Farms completed a bought-deal offering around 3.1 million shares at a price of C$9.40 per share for aggregate gross proceeds of C$28.75 million.
The company said its joint ventures for outdoor hemp production in the US completed harvesting of about 625 acres of the 870 acres of hemp planted in 2019, achieving an average yield of around 1,600 pounds per acre harvested. Sales of the hemp biomass are expected to begin in the fourth quarter.
First Shipping
In late September, Pure Sunfarms, which achieved a fourth consecutive quarter of positive EBITDA, shipped its first order of branded dried cannabis products to the OCS, following the receipt of an amendment to its license from Health Canada.
Shares of Village Farms gained 30% since the beginning of the year. The stock lost about 14% during Thursday’s extended session, following the announcement.