Record $1B profit for FCL in 2018
December 20, 2018
Federated Co-operatives Limited (FCL) had more to celebrate than its 90th anniversary this year, with record profits driven by exceptional market conditions in the energy sector. True to its co-operative roots, FCL is sharing the majority of these profits with local co-ops in Western Canadian communities.
For the year ended Oct. 31, 2018, FCL recorded revenues of nearly $10.7 billion, up eight per cent from $9.8 billion the previous year. From these revenues, FCL realized record earnings of almost $1.1 billion, up from $575 million in 2017. This surpasses the previous record of $879 million in 2013 and and far outstrips the 10-year average of $689 million.
“These results are above and beyond anything we anticipated and we’re not expecting to see the same exceptional results in 2019 because new policies and market conditions are already affecting profitability in our energy business lines,” said FCL CEO Scott Banda.
“However, 2018’s results are important to our co-operative; what makes us a different kind of business is what we do with these profits. We pass them on to locally owned and operated co-ops across Western Canada, which in turn pass much of their profit on to their own members and reinvest the rest in their local operations and communities. It’s who we are, it’s why we’re here and it’s one of the reasons that Co-op keeps growing after all these years.”
Profits returned to Co-ops and their local communities
This year, $789 million is being returned to the more than 170 independent retail co-operatives that are FCL’s members and owners. Over $630 million of this will be in cash, with the remainder being additional share capital in FCL. This return is especially important because for the past few years, these retail co-operatives were impacted by the economic downturn and received lower returns from FCL.
Over the past 10 years, FCL has provided more than $4.7 billion in returns to these local retail co-ops. They invest these returns into their operations, such as new and renovated facilities, to serve the needs of Western Canada’s 1.9 million individual co-op members—and many more customers—in more than 580 Western Canadian communities.
For its part, FCL will be making investments into its current assets and facilities, such as the $140 million project to reduce the amount of sulphur in gasoline produced at the Co-op Refinery Complex (CRC). FCL will also prepare for the future knowing that carbon regulations will have a major impact on operations, not only at CRC but across all business areas.