Federated Co-operatives Ltd sees drop in profit amid Covid-19 disruptions

The federation's net profit dropped by 13.5%

Canadian business Federated Co-operatives Ltd (FCL) reported a net profit of CA$177M for the year to 31 October 2020, down 13.5% from $959m in the previous year.

The group recorded revenues of $7.9bn down from $9.2bn in the previous year. Meanwhile $117.5m of the profit was returned to local member co-ops. Owned by 190 co-ops across Western Canada, FLC says the results were affected by the disruption and uncertainty brought by Covid-19.

“We expected to face economic headwinds entering 2020, but nothing like what we encountered,” CEO Scott Banda wrote in the annual report.

The group witnessed record sales in crop supplies and propane, as well as a record year in fertiliser volume. He added that while the food and home and building solutions divisions also had strong performances, these could not cover the losses suffered in the energy business, where sales dropped by $1.3bn in 2020.

Mr Banda added: “This past year will forever be associated with the Covid-19 pandemic. We’ve needed to think differently and challenge historical norms and assumptions while ensuring we maintained uninterrupted delivery of our essential services across Western Canada. This year’s circumstances were extraordinary, requiring us to adapt and evolve, relying on one another and the unity of our Federation to manage through the disruption and uncertainty.”

Sharon Alford, president and chair, said: “We faced significant challenges and drew on the strengths of our co-operative and our Federation to address them. From our people who demonstrate such support for one another and for our communities to our financial resources and our supply chains, together we benefited from the strength of our co-operative model.”

FCL invested $8.1m in community projects throughout the year. Local co-ops banded together to deliver Co-op Helps, a campaign that allowed customers and members to nominate people who needed help to deal with the pandemic or those who were making a difference in their communities’ response to the pandemic. The co-ops sent more than 2,500 gift cards to nominees and shared thousands more messages from customers thanking all those helping respond to the pandemic.

Last year was also marked by the ratification of a seven-year collective bargaining agreement at the FCL owned Co-op Refinery Complex, after a long dispute with Unifor union workers.

Related: Unifor and Co-op Refinery Complex ratify agreement

“I’m proud that FCL and our local co-ops have confronted this year’s challenges head-on and we have continued to meet the needs of Western Canadians,” said Mr Banda. “Co-ops have shown new levels of co-operative spirit during the Covid-19 pandemic, tackling problems together while meaningfully contributing to local communities as demonstrated by our ongoing investment in the west.

“We will continue to persevere through this pandemic by working together, supporting our communities, and adjusting to ensure the long-term sustainability of our co-operative.”

The full report is available on FCL’s website.

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