Sollio Cooperative Group closed out the fiscal year on October 28, 2023 with a net surplus of $115.4 million, a remarkable turnaround compared with the net loss of $336.9 million recorded the previous year.
Consolidated sales were $8.3 billion, down slightly over the previous year’s sales ($8.4 billion). The organization’s financial position was bolstered by cutting long-term debt by more than half, which was $571.5 million at the end of fiscal year 2023, the lowest it has been in the past five years. At its Annual General Meeting, Sollio Cooperative Group also announced the repurchase of $28 million in shares.
“We are pleased with and proud of these results,” said Pascal Houle, Chief Executive Officer of Sollio Cooperative Group. “Not only have we restored profitability, but the trend we see for the coming years is encouraging. We’ve spent the past few years implementing an ambitious, necessary and realistic recovery plan, and it’s paying off. The plan has been instrumental in significantly reducing our debt and solidifying our financial footing, while limiting the impact on our marketing tools and services to members, which are at the heart of our mission.”
While the optimization plan is progressing well, challenges remain. “The volatility of commodity prices, rising costs due to inflationary pressure, high interest rates, the historic drop in housing starts, the labour shortage, climate change and geopolitical issues are all factors that have affected our activities and demand our continued vigilance” per Houle.
Division performance meets or exceeds expectations
Sollio Cooperative Group operates through three divisions: Sollio Food, under the Olymel banner, Sollio Retail, under the BMR Group banner, and Sollio Agriculture.
Sollio Food – Of Sollio’s three major divisions, Sollio Food (Olymel) saw the greatest turnaround in 2023, with a net surplus of $138.3 million recorded in 2023, compared with a loss of $446.1 million in 2022. A Canadian leader in the production, processing and distribution of pork and poultry, Olymel achieved this turnaround in part by improving the performance of the fresh pork industry, reducing its slaughter volume, consolidating plants and distribution centres, disposing of non-strategic assets, recruiting foreign workers to offset local labour shortages, and focusing on value-added products. The resumption of exports in some markets also fuelled the higher profits in this sector.
The pork industry remains under pressure, however. Despite the significant improvement in overall results for the division, the fresh pork sector did not achieve profitability in 2023. “The pork industry is in a major crisis around the world,” Mr. Houle said. “We all want a strong, dynamic pork sector. That is the goal of the robust recovery plan we implemented in this sector, a sector driven by people who put their heart into their work and play a major role in the economic development of Québec and its regions.”
Sollio Retail – Sollio Retail (BMR Group) reported a net surplus of $34.5 million in 2023, compared with $41 million the previous year. After prosperous years during the pandemic, the division faced difficult market conditions, marked in part by a historic drop in housing starts (mainly in Québec), high household debt levels, and unusually high interest rates and inflation. By recruiting new dealers in Québec and Ontario and implementing numerous initiatives to streamline activities, BMR Group delivered a solid performance despite the wider context.
Sollio Agriculture – Sollio Agriculture, which specializes in the supply of agricultural inputs (livestock and crop production) and value-added agronomic services, met expectations during the year despite a volatile market and a substantial decline in commodity prices. While the division was able to deliver a marked improvement in operating results, it a drop of $72.6 million in its net surplus, or a loss of $53.0 million in 2023, compared with a gain of $19.6 million in 2022. This result is due in large part to the devaluation of long-term assets and is also being compared to last year’s incredible performance in the crop production sector, a year which also saw non-recurring gains on the disposal of certain assets.
Looking to the future
Sollio Cooperative Group celebrated its 100th anniversary in 2022. Much has changed over the past century, but our mission has remained constant: help feed people, bring prosperity to farming families, and play a role in the economic development of Québec and its regions.
“To pursue our mission, we need a strong, agile organization,” said Board Chair Richard Ferland. “This past year’s results prove that our strategy is working. Our members give our organization meaning and purpose. Sollio has always been there, and will continue to be there, to support them. But to ensure the sound management of everything they’ve built over the years, everything they’ve entrusted to us, we need a solid, effective cooperative. That’s why we’ll keep working to consolidate and solidify our foundations: to strengthen our vast network.”
Photo by Sollio Group Cooperative
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