Correction: A previous version of this article incorrectly identified FCL as the parent company of 190 co-op retail stores across Western Canada. It has been amended to reflect that FCL is owned by 190 co-ops in Western Canada.
It was a tough year for Federated Co-Operatives Limited (FCL); while the company finished slightly in the black, its profits have dropped dramatically in 2020, according to its annual report.
Part of the reason could be ongoing changes in the energy industry, according to data.
FCL is owned by 190 co-ops across Western Canada.
Overall, FCL finished the year with $177 million in net profit. It’s a big number, but dwarfs compared to its annual sales of $7.9 billion.
The biggest hit was to its energy sales, for things like gasoline. The company’s sales on energy dropped by $1.3 billion dollars in 2020, according to its CEO.
“The pandemic completely disrupted people’s driving patterns, work patterns, people staying at home so that caused significant cut in demand in 2020,” explained Scott Banda.
Oil prices also dropped during the pandemic, at one point below zero. But the billion-dollar drop isn’t just because of the state of the world.
FCL said the market has been changing for a while.
“Vehicles continue to be efficient every single year, alternatives such as electric, hydrogen are all being considered and will impact that demand side,” Banda said.
Food, home building sales on the rise
There were some wins for the company in 2020. Food sales brought in nearly $20 million than the year before; meanwhile, home and building sales jumped by nearly $40 million.
“Everybody had a hammer in their pocket this last year, getting out their to-do list,” Banda said.
Banda said looking forward, FCL needs to adjust to changing demands for energy over the next decade or so.
It said its oil refinery in Regina isn’t producing as much.
FCL said it’s looking at ways to change and improve operations; it’s unclear what those changes at the refinery or other areas might be.