Federated Co-op Ltd. achieved a record $10.8 billion in sales last year.
However, its net earnings of $656 million were down from a record $846 million in 2013.
Lack of production at the Co-op Refinery Complex in Regina and a prolonged maintenance turn-around significantly affected company profits. An explosion at the refinery in December 2013 continues to hamper production.
“We processed approximately 10 percent less at the refinery, and as a result it impacted our earnings in 2014,” Scott Banda, chief executive officer of FCL, said during the company’s annual general meeting in Saskatoon March 2.
Read Also
Strong cattle prices boost forage sales, reps report at Ag in Motion 2025
Representatives from Proven Seed and BrettYoung at Ag in Motion 2025 are reporting strong forages sales across Western Canada this year, driven by high cattle prices, as well as more producers establishing new, higher-quality stands and exploring drought-tolerant varieties.
Patronage allocation of $451 million was lower than the $573.7 million in 2013 and the $369 million share of redemption was down from $464 million in 2013.
However, Banda said FCL has re-turned $4.4 billion into the hands of local retail co-ops in the past 10 years. In addition, it has spent $4 billion on capital expenditures since 2010, including more than $3 billion to expand and revamp its refinery.
Continued investments for major capital investments included a new petroleum terminal at Carseland, Alta., the waste water improvement project at the refinery and the purchase of a second office building in Saskatoon.
Other operational in-creases included the purchase of 14 food stores and four gas bars from Sobeys Inc.
He also said creating sustainable value for retail co-op members is about investing in local communities, adding personnel capacity, connecting people to communities and creating tangible assets.
“It’s the people, process, cultures, the leadership of our people that need to be enhanced more so that we’re constantly vigilant in looking for stress points, improving our maintenance, dealing with those things every day all the time,” he said.
Besides a much larger digital presence last year, Banda said the company brand is increasingly being promoted at several levels.
“We’re telling our story very differently, both through social media and other ways about who we are and what we’re doing here,” he said.
A bright spot last year were the agricultural businesses, which Banda said exceeded FCL’s financial expectations in 2014.
FCL acquired 17 fertilizer, seed and agricultural chemical supply centres from Viterra in November 2013. Ownership and operations of 15 of the sites were transferred to nine retail co-operatives.
Upcoming challenges for the coming year include low oil prices and the impact on the refining process.
However, a large concern is the ever growing competition.
“We’re in businesses that have multi, multi competitors in them, and I would suggest the size and sophistication of those types of competitors continues to increase. That’s a challenge when you are more of a local business,” he said.
