Organto Foods Inc., an integrated provider of fresh organic vegetables and fruits today updated previous revenue guidance that was provided on August 21, 2019, noting significant upside versus the previous guidance that was provided.
Revenues for the third quarter ending September 30, 2019 are expected to be approximately CDN $1.91 million versus previous guidance of CDN $1.3 to CDN $1.5 million. Quarterly revenues of CDN $1.9 million are a new record for the Company, and represent a 336% increase over the third quarter of 2018 as well as a significant improvement over the first and second quarters of 2019. Revenues were positively driven by a diverse set of fresh organic and conventional products including asparagus, avocado and mangos and sold into a variety of customers in the Netherlands, Spain, Russia, UK, Sweden and Denmark. Gross margins for the quarter increased significantly versus prior periods and are expected to be in the range of approximately 9% of revenues, also a quarterly record for Organto, driven by the benefits of the Company's re-engineered supply chain and rationalized cost base.
"We are very pleased with our projected record third quarter revenue and margin results which reflect the efforts we have made to reposition our business in the fast-growing fresh organic vegetables and fruits category. We believe the opportunity in organic vegetables and fruits is very strong as the global trend towards healthy eating and wellness continues to drive growing demand on a global basis." commented Rients van der Wal, CEO of Organto Europe B.V. "We continue to build out our platform and have recently expanded our supply of fresh avocados and organic blueberries, all the while continuing to develop new strategic supply sources to meet market demand. Following our recent repositioning and with our expanded customer base and supply chain capabilities, we believe Organto is well-positioned to capture this market opportunity." added Mr. Van der Wal.
Over the past year, Organto has repositioned its organic foods platform shifting from an asset heavy, single revenue stream business model, to an asset light, multi-stream business model. The Company has made important progress in executing its plans including exiting Company-owned growing operations, selling its processing facilities in Guatemala and exiting Company operated packaging operations in the Netherlands, all in favor of strategic sourcing arrangements with grower partners in Peru, Argentina, Mexico, Zimbabwe and others and third party processing and packaging arrangements with globally positioned strategic partners.
Organto has also streamlined its cost base and expanded its product offering from high-value organic vegetables including organic green beans, sugar snaps and snow peas to other value-added organic and conventional vegetables and fruits including asparagus, avocado, blueberries, mango and other products.