While Canadian farming company Village Farms International Inc. (TSX: VFF) (Nasdaq: VFF) has grown its cannabis business over the year, that momentum stalled in its most recent fiscal period.
On Tuesday, the company released its earnings results for the three months ending Dec. 31, with Canadian cannabis sales of US$36.7 million — up less than 1 per cent from US$36.1 million in the previous quarter.
And fourth-quarter sales included partial results from Rose LifeScience — which the firm took a majority stake in, in November — indicating sales slowed for Pure Sunfarms, a darling among Canadian cannabis firms.
Net income for Canadian cannabis dropped 34 per cent in the quarter to US$3.5 million from US$5.3 million.
Over the period, wholesale dipped to 25 from 34 per cent of total sales. And retail flower rose to 64 from 59 per cent of total sales.
But U.S. cannabis sales, from its Balanced Health Botanicals and VF Hemp acquisitions, nearly doubled to US$7.5 million from US$3.5 million.
Produce sales contracted almost 7 per cent to US$38.4 million from US$41.2 million.
Overall, total topline revenue inched up to US$72.8 million from US$72.4 million. But net income rose 200 per cent to US$2.1 million from US$0.7 million.
Adjusted earnings before interest, taxes, depreciation and amortization fell 21 per cent to US$5.3 million from US$6.7 million.
The performance of the company’s Canadian cannabis operations throughout 2021 contributed to a year of 58-per-cent revenue growth, supported by the profitable contribution from Balanced Health since its August acquisition, Village Farms CEO Michael DeGiglio said in a statement.
“2021 was also a year in which we meaningfully moved forward our growth strategies — in high and low-THC cannabis, in North America and abroad — which we expect will position Village Farms to build on our current momentum for the next phase of profitable, outsized growth.”
Company stock was up over 1 per cent Tuesday to US$5.39 on the Nasdaq.