Village Farms reports lower prices in vegetable sales

Village Farms announced its financial results for the fourth quarter and year ended December 31, 2018.

When it comes to vegetables, sales for the year ended December 31, 2018 decreased (5%) from the year ended December 31, 2017. The decrease is due to the loss of tomato production from the Delta 3 facility, which was contributed to Pure Sunfarms in 2017 and the company's lower production at its Texas facilities. Net price for tomato pounds increased 4% for the year ended December 31, 2018 versus the year ended December 31, 2017 due to a higher percent of higher priced tomato production in 2018 as compared to 2017. Pepper prices decreased (2%) over the comparable period in 2017, and cucumber prices decreased (1%) for the years ended December 31, 2018 over the comparable period in 2017.

Cost of sales for the year ended December 31, 2018 decreased (3%) from the year ended December 31, 2017, primarily due to the loss of the Delta 3 facility and a decrease in costs at the Texas facilities due to a decrease in pounds produced partially offset by an increase of 6% in contract sales cost.

EBITDA for the year period ended December 31, 2018 decreased (62%) from the year period ended December 31, 2017, primarily as a result of a decrease in income from operations that was caused by the removal of the Delta 3 facility as well as a decrease in production for the Texas facilities. The production shortfall at the Texas facilities resulted in decreased sales and an increase in cost per pound for product produced as the fixed costs were spread over less pounds.

Access the full results here.


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