(CKOM News file photo)

By CKOM News

Federated Co-op’s annual report shows $1.3B sales decline in 2020

Mar 3, 2021 | 10:09 AM

The COVID-19 pandemic hasn’t been kind to Federated Co-op.

The company owned by roughly 190 co-ops in Western Canada is reporting a sharp decline in net profits, according to its annual report.

Net profits finished at $177 million for 2020, down from $959 million in 2019. Annual sales came in at $7.9 billion, down from $9.2 billion.

Data released in the annual report point to sales dropoffs in the energy sector accounting for much of the net profit losses compared to last year.

“While the first four months of the fiscal year proceeded as expected, the pandemic’s spread and contraction of the global economy led to an overall sales decline in 2020,” Federated Co-op Limited CEO Scott Banda said.

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With the pandemic altering driving patterns, travel plans and keeping plenty of people at home, demand for energy products like gasoline fell sharply.

“While we’ve benefitted from favourable market conditions in our energy business in recent years, achieving some of our best-ever earnings, we’ve seen the world energy market collapse and demand for fuel destroyed by the pandemic. As a result, our earnings have taken a significant hit this year and are among the lowest we’ve seen in the last 20 years,” Banda said in his message to members.

FCL reported record sales in crop supplies and propane in 2020. Food sales also increased nearly $20 million from the year before. Home and building sales increased by roughly $40 million.

“However, none of these increases came near to covering what we lost in our energy business,” Banda said. “The refining industry faced significant challenges, as market conditions were tighter than expected. We expect those same conditions to continue into 2021.”