VFF stock is leading the broader cannabis sector higher after Village Farms International (TSX:VFF) (NASDAQ:VFF) turns profitable in the fiscal second quarter.
Pure Sunfarms Supports Revenue Growth
Although the last few months have not been that good for most marijuana stocks, Village Farms International has been an exception. Late Monday, the company announced its Q2 2019 financial results and it proved to be a momentous one as the company managed to swing into profit.
Village Farms generated profits of 20 cents per share as opposed to losses of 5 cents a share in the same quarter in 2018. VFF stock rose by as much as 8% following the publication of the results. The net income for the period hit $9.89 million as opposed to $2.29 million in the prior-year quarter. More importantly, this quarter also included an income of $14 million from its joint venture Pure Sunfarms.
That being said, the product sales for Q2 2019 stood at $41.33 million, which reflects a slight drop from its $42.04 million worth of sales in the prior-year period. The consolidated sales for the period increased significantly to $53.45 million, thanks to Pure Sunfarms. In the prior-year quarter, the same metric came in at $12.12 million.
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VFF stock is up 8.50% and now trading at $14.50 on the Nasdaq. On the Canadian stock, Village Farms stock is trading higher by 8.30% at $19.25.
The company’s Chief Executive Officer Michael DeGiglio stated that he expects Pure Sunfarms to continue to contribute handsomely to the company’s growth in the future.
Village Farms International began as a vegetable grower but eventually opened up its own cannabis operation in the form of the joint venture Pure Sunfarms. It partnered with Emerald Health Therapeutics (TSXV:EMH) (OTCQX:EMHTF) to create the joint venture. Village Farms’ greenhouses meant for the cultivation of vegetables were then turned into cannabis cultivation sites.
The Delta 3 greenhouse is already operational. An identical greenhouse known as Delta 2 is expected to be operational by the end of 2019, and that would further raise the company’s production capabilities. Pure Sunfarms expects to produce as much as 150,000 kilos of cannabis a year when both facilities are operational.
VFF stock is the biggest cannabis stock gainer this year, with a jump of 280% since the beginning of 2019.
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Featured image: DepositPhotos © stevanovicigor
