Canadian agri-food co-op Sollio Cooperative Group reports CA$337.5m loss

‘Every decision is considered in light of the current situation and the future, and decisions are taken in order to return to the path of profitability’

Canadian agri-food co-op Sollio Cooperative Group ended its fiscal year on 29 October 2022 with a loss before taxes and patronage refunds of CA$337.5m, an increase of 1.5% on the previous year’s loss of 21.5m.

The group also reported $8.9bn in sales, up $1bn from the previous year.

“After several years of growth, last year we announced and initiated a recovery strategy and an asset optimisation plan, which we continued this year,” said CEO Pascal Houle, who has been at the helm of the business since September 2021.

The group said the results were affected by a combination of contextual factors, including an accounting depreciation of intangible assets in the Olymel Food Division, major challenges in the hog industry due to the impact of the pandemic, labour shortages, rising costs related to inflation and supply chain disruptions, the closure of the Chinese market over the first three quarters of the fiscal year and a four-month strike at our Vallée-Jonction plant.

Several divisions performed well with BMR Group enjoying a record year. Sollio Agriculture’s crop production exceeded expectations, and Olymel’s processed pork and poultry sectors reporting outstanding results. Labour shortages also impacted its results, leading to prioritising slaughter and producing low-margin primary cuts. The groups said it hoped the Canadian government’s temporary programme allowing agri-food processors to raise the threshold for temporary workers in their plants should help to address this challenge.

“We knew that the year was going to present a lot of challenges, and we took the necessary steps to return the company to profitability,” said Houle. “We took the actions we did with a view to limiting as much as possible the impact on marketing tools and services to member producers, which are at the heart of our mission. Of course, we fully intend to continue along these lines in the coming year.” 

Sillio is owned by more than 123,000 members, producers and consumers grouped in 48 traditional agricultural and consumer co-operatives. Going forward, the executive team will focus on the consolidation of activities, the recovery of some operations and the optimisation of assets, as well as reducing the business’s debt.

“We have benefited from a period of growth with favourable winds and we had to deal with an extraordinary crisis. Since then, every decision is considered in light of the current situation and the future, and decisions are taken in order to return to the path of profitability,” said Sollio chair Ghislain Gervais.

“We are confident that the measures we have taken over the past year are paving the way for a better future for the cooperative. The indicators for the first quarter of 2023 show that we are heading in the right direction.”