It's been a really good year so far for Village Farms International (NASDAQ:VFF). The Canadian company ranked as the best cannabis stock of the first half of 2019, with the share price more than quadrupling year to date.

Investors wondering if Village Farms could keep the good times rolling with its second-quarter results got their answer this week. The company announced those results before the market opened on Tuesday. Here are the Q2 highlights.

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By the numbers

Second-quarter revenue was $53.5 million, including its produce operations and its share of the Pure Sunfarms joint venture with Emerald Health Therapeutics (OTC:EMHT.F). This reflected a 27% jump from the prior-year period's $42 million. 

The company announced net income in the second quarter of $9.9 million, or $0.20 per share. This was a major improvement from the net loss of $2.3 million, or $0.05 per share, recorded in the second quarter of 2018.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) were $4.6 million. In the prior-year period, the company announced an EBITDA loss of $1.3 million. 

Behind the numbers

Produce sales declined a little from the prior-year period but still contributed 77% of Village Farm's total revenue. That small decrease was more than offset by a strong performance for Pure Sunfarms. The cannabis joint venture made $32.4 million in Canadian dollars ($24.2 million), a terrific 125% jump over its first-quarter revenue. Village Farms recorded half that total in its consolidated Q2 results.

Emerald has the option to purchase 40% of Pure Sunfarms' cannabis production but hasn't been exercising its right to do so. Instead, all of the cannabis produced by the joint venture has been sold to other licensed producers in the spot market. That's good news for Village Farms since prices in the spot market are higher than the predetermined price that Emerald would have paid Pure Sunfarms. 

There is a catch with Village Farms' nice profit in the second quarter, though. Net income would have been significantly lower without a nearly $8 million gain from an adjustment in the valuation of its biological assets. However, Village Farms would still have posted a profit in Q2 as well as positive EBITDA even without that adjustment.

Looking ahead

The future could look even brighter for Village Farms. Pure Sunfarms' Delta 3 greenhouse wasn't fully operational during all of the second quarter. Also, Pure Sunfarms expects to be able to sell directly to retailers in Canadian provinces and territories, boosting its average selling prices. In addition, the joint venture is expanding into oils and other derivative products. 

Village Farms' expansion into the U.S. hemp market could also begin to pay off. CEO Michael DeGiglio said, "We remain firmly on track to begin sales of hemp biomass this year, transitioning to sales of CBD crude oil early in 2020, and then commence CBD product manufacturing." 

With all of these positive developments, it seems possible that Village Farms just might keep the good times rolling throughout the rest of this year and into 2021.

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