MONTREAL - Fiscal year 2018-2019 confirms the wisdom of the growth strategy adopted by Sollio Cooperative Group (formerly La Coop fédérée) a few years ago, with a record $7.282 billion in consolidated sales in 2019, up $766 million from the previous year. Earnings before patronage refunds and income taxes were $79.4 million, while equity and preferred shares totalled $1.8 billion and assets were up to $3.9 billion. Earnings were lower than in previous years, however, due to a particularly difficult business context stemming notably from the global geopolitical and trade tensions that marked 2019.
2019 financial results
The Agribusiness Division, Sollio Agriculture, had a good year, with earnings attributable to members of $36.4 million, up $3 million over the previous year.
The Retail Division (BMR Group), for its part, reported earnings before income taxes attributable to members, not including corporate expenses, of $16.7 million, compared with $16.9 million last year, a slight decrease of $200,000. Tighter controls and more advantageous trade agreements helped improve the margin, but earnings were offset by an increase in some operating expenses, including transportation costs, as a result of the labour shortage, as well as storage costs, due to a need for additional space.
Lastly, the results of the Meat Division (Olymel) were affected by a few significant events, including the Chinese embargo on Canadian meat imports, which had a negative impact on results, especially in the fresh pork sector. Its earnings before income taxes attributable to members stood at $67.1 million, compared with $167.9 million in 2018, a decrease of $100.8 million.
Performance despite adversity
"2019 was a year of consolidation and acquisition," said Ghislain Gervais, President of Sollio Cooperative Group. "We now steadfastly turn our attention to the future, with some major projects arising from our strategic planning process, 'La Coop fédérée of tomorrow,' coming to a conclusion in the past year."
"In terms of financial results, the cooperative recorded its fourth best year in its nearly 100-year history," said Gaétan Desroches, Chief Executive Officer of Sollio Cooperative Group. "The results are remarkable given the geopolitical context of the past year, specifically the closure of the Chinese market to Canadian pork and canola exports, which had a significant impact on our sales."
A year of growth
In recent months, the organization acquired a number of businesses in Quebec and elsewhere in Canada and entered into new partnership agreements. A highlight is the acquisition of the assets of F. Ménard, a leader in the Quebec pork sector that produces over 1 million hogs per year and employs 1,200 people. The acquisition will enable Olymel to maintain its position as one of the largest hog processors in North America.
In addition, massive investments have been made in connection with the construction and installation of the Port of Québec's grain port terminal, a project designed to give farm producers access to the international grain export market.
This year, Sollio Cooperative Group also had the pleasure of welcoming 60 new independent BMR retailers, who will now be able to reap the benefits of the cooperative model.Source : CISION