Sollio Cooperative Group's 2021–2022 financial results
A year of challenges and optimization
Quebec City, February 23, 2023 – Sollio Cooperative Group completed its fiscal year on October 29, 2022 with $8.9 billion in sales, up $1 billion from the previous year. This year, the organization reports a loss before taxes and patronage refunds of $337.5 million this year, including loss from discontinued operations. In the previous fiscal year, the loss before taxes and patronage refunds was $21.5 million.
The fiscal year that ended in October 2022 represented a challenge for Sollio Cooperative Group, which had foreseen and communicated this in its last annual report. At the same time, some of the divisions are showing interesting results.
“After several years of growth, last year we announced and initiated a recovery strategy and an asset optimization plan, which we continued this year,” said Pascal Houle, Chief Executive Officer of Sollio Cooperative Group.
Despite results that fell short of expectations, the excellent results in some of our business sectors should be noted, including poultry, further processed pork, crop production and particularly in the retail division with Groupe BMR. In the Agriculture Division, the repositioning plan for the grain sector is progressing well and the crop production sector had a good year despite the difficult situation created by the war in Ukraine. The Groupe BMR Retail Division has implemented a number of initiatives that have allowed it to navigate through these exceptional market conditions. After two years of sustained demand owing to the COVID-19 pandemic, a decrease in sales was expected compared with 2021. Instead, sales are up by $44.0 million (+2.9%) compared with 2021.
“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 Pascal Houle, CEO of Sollio Cooperative Group. “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.”
A difficult context in the fresh pork sector
A combination of contextual factors have led to the results presented today by the organization.
These factors include an accounting depreciation of intangible assets in the Olymel Food Division, as well as major challenges in the hog industry owing to a number of factors, including the impact of the coronavirus 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, for which Sollio Cooperative Group is committed to implementing a robust recovery strategy. This involves reducing the number of hogs slaughtered and reallocating the workforce, as well as increasing the production of value-added products, in particular through the conversion of the Princeville plant, and the recruitment of many temporary foreign workers.
“The current situation has a major impact on the entire pork industry. As a key player in the sector, we are committed to working together to find sustainable solutions for the industry,” said Mr. Houle.
Although the situation was more difficult for the Olymel Food Division, which explains the financial results presented today, the measures implemented allow us to foresee a reversal of the trend and more positive financial indicators. However, the sector remains under close scrutiny with a view to returning to profitability.
A necessary and appropriate optimization plan
Following this fiscal year, Sollio Cooperative Group will continue along the path of consolidation and optimization of its assets that it took at this time last year. Therefore, its renewed management team, particularly since the arrival of Pascal Houle as CEO in September 2021, together with the members of its management team, will continue to take robust action to deal with the economic situation.
These actions are part of a necessary and adapted plan, which was first deployed in 2022, and which provides for the consolidation of activities, the recovery of some operations and the optimization of assets, after many years of expansion. This plan also aims to reduce the company's debt and achieve a better financial ratio, thus ensuring the cooperative's sustainability, while avoiding as much as possible the impact on members' agricultural businesses. The delivery of the asset optimization plan will give Sollio Cooperative Group the flexibility and means to achieve its ambitions.
“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 Ghislain Gervais, Chairman of the Sollio Cooperative Group Board of Directors.
“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,” said Pascal Houle, CEO of Sollio Cooperative Group.
Looking straight ahead
In the century that has passed since Sollio Cooperative Group was founded, the company has had its ups and downs, but its mission and business model continue to play a major role in the Quebec and Canadian agri-food world. With the expertise of the teams in place, the organization's firm commitment to implementing its asset optimization plan, combined with the strength of the cooperative model, allows it to look towards the future. Listed as one of Canada's best managed companies in 2021 for its overall performance and sustainable growth, Sollio Cooperative Group continues its commitment to corporate responsibility.
About Sollio Cooperative Group
Sollio Cooperative Group is Canada’s largest agricultural cooperative with Quebec roots. Since 1922, our day-to-day work of cultivating, growing, producing, processing and building tomorrow’s economy has been part of the DNA of our 15,850 employees and the 7,000 workers in our affiliated cooperatives. With more than 123,000 members, producers and consumers grouped in 48 traditional agricultural and consumer cooperatives, Sollio Cooperative Group helps feed people by bringing prosperity to farming families and ensuring a sustainable future for everyone. Thanks to its three divisions—Sollio Agriculture, Olymel L.P. and BMR Group Inc.—Sollio Cooperative Group proudly drives economic and social development in the regions, generating sales of $8.9 billion (over $11.6 billion if we include our affiliated cooperatives). Sollio Cooperative Group is considered one of Canada’s best managed companies. To learn more, visit sollio.coop/en.
Sollio Cooperative Group
Director of Communications