SASKATOON – Records don’t seem to last long at Federated Co-operatives Ltd.
For the second year in a row, the organization has reported its best-ever financial performance, delegates attending last week’s annual meeting were told.
Sales in the year ended Oct. 31, 1993, were up 13 percent to $1.92 billion, while net savings were up 22 percent to $112 million.
An improved bottom line is nothing new at FCL, which is the central wholesaling, manufacturing and administrative organization for the co-operative retailing system in Western Canada.
Sales have increased 41 percent during the past 10 years, while net savings have nearly quadrupled during the same period.
Read Also
Going beyond “Resistant” on crop seed labels
Variety resistance is getting more specific on crop disease pathogens, but that information must be conveyed in a way that actually helps producers make rotation decisions.
FCL president Vern Leland said the outstanding results of the past decade are no accident. Rather, they are the result of a lot of hard work by thousands of co-op members working at the local level.
“They’ve addressed the image of the co-operatives, they’ve addressed the efficiency of the co-operatives and they’ve just done a real good program in the communities that they serve to be the best facility in the community,” he said. “And in most communities in Western Canada they are the best place to shop and that’s brought the success.”
FCL’s financial success has come during a decade in which the farm economy in Western Canada has been in the doldrums as a result of low grain prices. But Leland said that should come as no surprise.
“In the 65-year history of our co-operatives … when the local rural economy has been tough, people have turned to their co-ops and we have done better,” he said.
Savings down
For the current year, FCL is budgeting for a slight increase in sales to $1.97 billion and net savings of $103 million. Savings are expected to be down because of a potential cost of $15 million associated with refinancing of the NewGrade Energy Inc. heavy oil upgrader.
As is usually the case, food and petroleum accounted for the bulk of Federated’s business in 1993, a combined 70 percent of total sales and 84 percent of net savings.
Food sales were up 18 percent to $983 million. The gross margin on food sales was 8.8 percent, producing net savings of $33 million. Petroleum sales were up 12 percent to $576 million, with a gross margin of 16.2 percent and net savings of $61.4 million.
Hardware and building products sales were $207 million, forest products $50 million, crop supplies $46 million, feed $43 million and fashions $17 million.
Other highlights of the financial year included:
- From the net savings of $112 million, a total of $103 million was allocated to member co-ops as patronage refunds.
- The ratio of current assets to current liabilities improved slightly to 3.1:1.
- Net working capital (current assets less current liabilities) increased by $30.5 million to $399.2 million.
- Members’ equity was up five percent to $513 million, representing 69 percent of FCL’s total assets.
