Village Farms International, Inc. (NASDAQ: VFF), reported a wider loss for the fourth quarter, hurt by a double-digit decline in sales. The company published the report on Monday evening after delaying it by a few hours. The stock dropped following the announcement.
Loss Widens
The Canada-based producer of vegetables and cannabis reported a net loss of US$7.2 million or $0.14 per share for the fourth quarter, compared to a loss of US$2.4 million or US$0.05 per share in the same period of last year. The results included earnings of US$1.8 million from Pure Sunfarms.
At US$33.06 million, product sales were down 15% from the year ago period.
“Even amidst the continuing challenging macro environment, partially due to slower than expected retail store openings, Pure Sunfarms reported positive net income and positive EBITDA in the fourth quarter – its fifth consecutive quarter of positive EBITDA. Fourth quarter sales reflect Pure Sunfarms’ transition from its focus entirely on the wholesale market to its focus on the branded retail market,” said CEO Michael DeGiglio.
During the quarter, Village Farms raised its ownership of its cannabis joint venture Pure Sunfarms to 53.5%, and subsequently to 57.4%. The company also launched a new large-format 28-gram high-quality cannabis product.
Annual Report
Earlier, the management in an SEC filing said it hasdsecured a 45-day extension for publishing the fiscal 2019 annual report, due to disruptions caused by the covid-19 outbreak. It also expressed concern over the financial impact of the epidemic on businesses and warned that the ongoing uncertainty might affect the company’s performance in the coming months.
Village Farms recently reached a settlement with Emerald Health Therapeutics in a long-pending dispute over ownership stake in Pure Sunfarms, their cannabis joint-venture.
Epidemic Crisis
The company’s operations have been hit hard by the coronavirus outbreak, which caused widespread disruptions across the business world. The setback came at a time when the Canadian cannabis industry is going through a tough phase.
Shares of Village Farms dropped 47% since the beginning of the year and 79% in the past twelve months. The stock closed the last trading lower and continued to drop during the after hours session.