Citing rising demand for its San Marzano tomato variety and benefits from the U.S.-Mexico suspension agreement, Village Farms International reports adjusted earnings hit $12.9 million in 2013, up from $1.6 million the year before.
The greenhouse grower continues to pursue development of proprietary varieties at its U.S. and Canada facilities, chief executive officer Michael DeGiglio said in a March 20 earnings call.
“We are starting to do some sampling prior to a launch of another new variety we feel strongly about,” he said.
Village Farms also produces cucumbers and bell peppers.
DeGiglio embraced the revised suspension agreement.
“I take my hat off to the Department of Commerce for doing the right thing,” he said. “The data has come out and it’s just incredible that there was over a 90% reduction in tomatoes coming into the U.S. labeled greenhouse. Mislabeling was a huge issue, and that’s resolved.”
That agreement provided definitions for greenhouse-grown product.
Delta, British Columbia-based Village Farms International also credits the return to full-year production in 2013 of half of its 80 hail-damaged greenhouse acres in Marfa, Texas. The site was hit by a May 2012 hailstorm. Another 20 acres, a $9 million investment, are due to be complete by the end of April and lift Marfa to 75% of original capacity.
“That will come into cash flow in July,” DeGiglio said.
The $12.9 million does not include $15.9 million in insurance proceeds for 2013. In September, Village Farms reached a settlement with Travelers Insurance Co. for $11.25 million in the Marfa hailstorm damage.