Village Farms International Inc (VFF) Q2 2025 Earnings Call Highlights: Record Profitability ...
Net Income from Continuing Operations: Improved to $9.9 million, or $0.09 per share.
Adjusted EBITDA from Continuing Operations: $17.1 million, representing 28.6% of sales.
Canadian Cannabis Gross Margin: 39%, the highest in three years.
International Export Sales: Increased almost 700% year-over-year.
Cash Proceeds from Transaction: $40 million, strengthening the balance sheet.
Cash Position: Ended Q2 with $65 million in cash.
Total Debt: $39 million at the end of Q2.
Canadian Cannabis Sales: $51.4 million, a 10% increase year-over-year.
Net Income from Continuing Produce Operations: Improved to $4.3 million.
Free Cash Flow: $12 million in the first six months.
Warning! GuruFocus has detected 6 Warning Signs with VFF.
Release Date: August 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Village Farms International Inc (NASDAQ:VFF) reported record levels of profitability in Q2 2025, with consolidated net income from continuing operations improving to $9.9 million.
The company successfully privatized about one-third of its produce assets, generating $40 million in cash proceeds, which strengthens its balance sheet.
International exports increased almost 700% year-over-year, with significant growth in markets like Germany and the UK.
The Canadian cannabis segment achieved a gross margin of 39%, the highest in three years, demonstrating successful margin improvement initiatives.
The company is expanding its production capacity, including the conversion of the Delta 2 greenhouse to cannabis cultivation, which is expected to add 40 metric tons of annual production.
Negative Points
Despite strong international sales, the Canadian retail branded sales were 20% lower than Q2 last year, indicating challenges in the domestic market.
The company is not yet seeing expected price increases in the Canadian retail market, suggesting ongoing supply issues.
There are concerns about oversupply in the Canadian cannabis market, which could impact future profitability.
The US cannabis business continues to face regulatory challenges, impacting sales and growth potential.
The company's expansion plans, while promising, involve significant investment and carry risks associated with market demand fluctuations.
Q & A Highlights
Q: Can you elaborate on the decision to expand the Delta 2 facility and the factors influencing this decision? A: Michael DeGiglio, CEO: The expansion is a low-risk investment as we are converting existing assets rather than building new ones. This USD7 million investment allows us to adjust capacity based on demand. Currently, we are not meeting all our commitments, leaving about $50 million in revenue on the table, so this expansion is necessary to fulfill customer needs without the risk of oversupply.
Q: What drove the strong international sales in Q2, and what are the expectations for the second half of the year? A: Ann Gillin, COO: Growth was driven by strong demand in Germany and the UK, along with onboarding new customers. We align our growth with the hottest international markets and work closely with trusted distributor partners. While we won't provide specific guidance, we expect continued growth and will support our retail partners in Canada.
Q: Can you confirm the EBITDA numbers by segment and the impact of the vendor settlement? A: Stephen Ruffini, CFO: The adjusted EBITDA from continuing operations was $6.4 million, including a $4.3 million vendor settlement. This settlement pertains to assets we retained and is nonrecurring. However, these assets typically have their highest revenue and EBITDA in the third quarter.
Q: How do you view the dynamics of the Canadian cannabis market, and what are your thoughts on the supply-demand situation? A: Ann Gillin, COO: Pricing in the wholesale market has stabilized, but retail pricing hasn't increased, indicating ample supply. However, we're seeing improving profitability and focus on profitable portfolios among producers. The market is starting to see normal supply-demand dynamics, which is positive for Canada's leadership in the global market.
Q: Are there any M&A opportunities you are considering, particularly in the Netherlands or Canada? A: Michael DeGiglio, CEO: We are proud of our organic growth, especially in international markets. While M&A is not off the table, it would need to be accretive or strategic. We are the partner of choice for many European companies, and M&A could play a role in the US market when it opens up.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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(TSXV: SIG) (FSE: 1RF) (OTCQB: SITKF) ("Sitka" or the "Company") is pleased to announce additional positive assay results from the Rhosgobel discovery at its 100% owned, road accessible RC Gold Project located in the Yukon's prolific Tombstone Gold Belt. The mineralized footprint of the Rhosgobel discovery is rapidly expanding with visible gold observed in 16 of the 22 holes drilled to date over approximately 900 metres of strike length within the 2.0 km x 1.5 km target outline represented by the >500 ppb gold-in-soil anomaly (see Figure 3). To date, results for just six of the 22 diamond drill holes completed at Rhosgobel have been received with all six holes returning >100 gram-metres (gold grade x length) intervals, including holes 004 and 006 in this release (see news releases dated November 25, 2024 and August 5, 2025). 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To view an enhanced version of this graphic, please visit: Figure 2: A cross section of holes DDRCRG-25-005, 006 and 011 showing >1 g/t gold mineralization starting from surface. All holes intersected similar mineralization with highlight assays displayed for Hole 006 returning 1.14 g/t gold over 166.0 m including 8.0 m of 4.86 g/t gold from surface. To view an enhanced version of this graphic, please visit: Figure 3: A plan map of the Rhosgobel Intrusion showing the 2025 drilling. The drilling is targeted based on previous shallow reverse-circulation drilling conducted in 1995 which had not been followed up on until Sitka's initial diamond drill discovery holes completed in 2024. The target is supported by a large 2.0 km x 1.5 km gold-in-soil anomaly which covers the central part of the intrusion. 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To view an enhanced version of this graphic, please visit: Figure 5: An example of drill core from DDRCRG-25-006 showing part of the interval of 8.0 m of 4.86 g/t Au starting at 13.0 m downhole within the broader interval of 166.0 m of 1.14 g/t Au from surface. The interval is hosted within altered and oxidized megacrystic quartz monzanite. To view an enhanced version of this graphic, please visit: RHOSGOBEL DRILLINGTo date, 22 holes totalling approximately 6,438 m have been completed at Rhosgobel. All holes drilled have intersected significant reduced intrusion-related gold (RIRGS) style mineralization including centimetre-scale, sheeted, quartz veins and larger, metre-scale quartz, and quartz-tourmaline veins (and breccias) cutting the feldspar megacrystic quartz monzonite intrusion. Visible gold has been observed within all styles of veins and is often associated with bismuthinite, scheelite, and molybdenite (see Figure 4). 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RC Gold Deposit ModelExploration on the Property has mainly focused on identifying an intrusion-related gold system ("IRGS"). The property is within the Tombstone Gold Belt which is the prominent host to IRGS deposits within the Tintina Gold Province in Yukon and Alaska. 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The Company is also advancing the Alpha Gold Project in Nevada and currently has drill permits for its Burro Creek Gold and Silver Project in Arizona and the Coppermine River Project in Nunavut, all of which are 100% owned by the Company. *For more detailed information on the Company's properties please visit our website at Upcoming Events Sitka Gold will be attending and/or presenting at the following events*: Precious Metals Summit, Beaver Creek, Colorado: September 9 - 12, 2025 Yukon Geoscience Forum, Whitehorse, YT: November 16 - 19, 2025 Swiss Mining Institute, Zürich, Switzerland: November 19 - 22, 2025 *All events are subject to change. The scientific and technical content of this news release has been reviewed and approved by Gilles Dessureau, V.P. Exploration of the Company, and a Qualified Person (QP) as defined by National Instrument 43-101. ON BEHALF OF THE BOARD OF DIRECTORS OF SITKA GOLD CORP. "Donald Penner" President and Director For more information contact: Donald PennerPresident & Director 778-212-1950 dpenner@ or Cor CoeCEO & Director604-817-4753 ccoe@ Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Cautionary and Forward-Looking StatementsThis release includes certain statements and information that may constitute forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking statements relate to future events or future performance and reflect the expectations or beliefs of management of the Company regarding future events. Generally, forward-looking statements and information can be identified by the use of forward-looking terminology such as "intends" or "anticipates", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would" or "occur". This information and these statements, referred to herein as "forward‐looking statements", are not historical facts, are made as of the date of this news release and include without limitation, statements regarding discussions of future plans, estimates and forecasts and statements as to management's expectations and intentions and the Company's anticipated work programs. These forward‐looking statements involve numerous risks and uncertainties and actual results might differ materially from results suggested in any forward-looking statements. These risks and uncertainties include, among other things, market uncertainty and the results of the Company's anticipated work programs. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. Readers are cautioned that reliance on such information may not be appropriate for other purposes. The Company does not undertake to update any forward-looking statement, forward-looking information or financial out-look that are incorporated by reference herein, except in accordance with applicable securities laws. We seek safe harbor. 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The height of the fill of each bar indicates the city's current performance on each priority (higher is better), and the horizontal lines on each bar indicate the performance for each of these priorities for a given future scenario. The bars with red fill indicate areas that would change for the better; those that are green show the city has already met the targets. Through this chart, CityScope helps residents understand their situation (insight again), extrapolate current trends (prediction again), evaluate possible alternatives (transformation), and find common ground (consensus). In Figure 2, these metrics are aggregated by street into a 3D map of the city. Positive changes are in green, negative ones in red, and alternatives can be modeled at the scale of the individual street, neighborhood, or the city as a whole. In Hamburg, these representations allowed users to understand trade-offs and find ways to overcome them. For example, the visualization made starkly clear the differences between the preferences of affluent communities, where proposals that threatened lower-density zoning received the worst ratings, and the city as a whole, where building more houses in underdeveloped areas to welcome refugees scored well. CityScope then helped the residents find the best way to accommodate these conflicting preferences. By evaluating competing proposals, it demonstrated that wealthier neighborhoods could benefit from more houses provided that a new metro line were also built in the process, thereby paving the way to consensus. The vizualizations also allow CityScope to yet again collect people's preferences, this time on the trade-offs and competing proposals. In Hamburg, the team administered surveys and organized workshops across the city with an augmented reality (AR) version of the platform (see Figure 3). The AR interface allowed participants to collaborate with CityScope to see the implications of their choices. Hamburg residents would come into the room and rearrange the LEGO-like bricks representing residential units, office buildings, parks, and other urban amenities in a specific zone, redesigning the city one brick at a time (Figure 3). When participants made these changes, the digital projection updated in real time to show how the proposed changes would affect quality of life. The platform also connected these changes with the zoning laws that would make them possible, bridging the gap between the LEGO game and policymaking. The interface also allowed participants to collaborate with each other in workshops across the city. That way, CityScope became a platform of direct community engagement, where technical and non-technical people, with different levels of understanding, gathered around the table to understand the impact that their common decisions would have on their city (the consensus function again). In Hamburg, 5,000 residents participated in CityScope workshops in 2016, considerably more than at any conventional town hall. What's more, by targeting diverse communities across the city, the CityScope team has managed to attract a representative sample of the population, rather than just the older, wealthier citizens who have historically participated in the city's urban planning. Making Decision-Making More Democratic Through its use of AI, CityScope addresses the key challenges we identified in city planning, and in group decision-making more generally: First, they circumvent slow bureaucratic processes. By aggregating all the relevant data into a dynamic model, CityScope analyzes trade-offs better than city officials ever could on their own because it integrates all perspectives and tests thousands of alternatives. The result is a considerably streamlined process, and also one that takes more perspectives into account more accurately. Second, they solve the problem of information overload and asymmetry. By intaking and processing vast troves of data and then providing clear visuals and methods for interacting with and sharing them, CityScope removes the informational barriers that favor those with more resources over those who lack money, time, or expertise, giving anyone the opportunity to understand and propose changes. Third, CityScope enables the full community to find a path to consensus, not just the elite. Residents may not agree on this or that housing project, but they can find common ground around shared priorities. By shifting the focus of deliberation from specific projects or laws to broader priorities for the city, CityScope reframes the discussion towards the bigger picture. Larson calls the platform a 'consensus machine' for a reason. Eighteen months after the partnership with CityScope began, Hamburg had not just housed thousands of refugees: It had strategically distributed them across the city to maximize social cohesion, economic opportunity, and community resilience. Since then, the city has been integrating CityScope into its decision-making processes more broadly, for transportation, energy use, and environmental regulation. When Russia invaded Ukraine in 2022, Hamburg had the tools to welcome tens of thousands of refugees in a fraction of the usual time And the United Nations now funds a project exporting CityScope to other cities that face an unexpected influx of refugees. Beyond CityScope Humans are not especially good at processing immense amounts of information and translating it into policy. They struggle to understand complexity and, left to their own devices, seldom find common ground on contentious issues. CityScope shows that AI can help. However, by themselves, platforms like CityScope cannot solve contentious problems. Most group decisions remain inescapably prone to conflict and while AI can help us understand and navigate tradeoffs, it cannot make tradeoffs disappear. No algorithm, however sophisticated, can replace a culture of healthy disagreement and mutual respect. In Hamburg, it was the residents and their leaders who made this conversation productive, not just the platform itself. Further, these tools only matter if they are integrated into the right ecosystem. In Hamburg, the city could not take advantage of CityScope without also reforming bureaucratic hurdles that prevented certain spaces from being repurposed or built upon. CityScope helped identify and prioritize those reforms, but without them, the remainder of its functions would have been futile. While AI can streamline processes and help us make better decisions together, only with the right leadership can these tools translate into collective action. Nevertheless, tools which combine sophisticated simulations with direct engagement can change how we make decisions in all kinds of institutions—cities, but also corporations, universities, or non-profits. Platforms like AnyLogic, FlexSim, and Visual Components are already developing similar tools for corporations, a trend that is likely to accelerate in the years to come. Far from a substitute for human decision-making, these platforms will offer a powerful complement to it: a way to harness data at the service of common goals.
