Olymel parent company posts profit in ‘pivotal’ year

Olymel parent company Sollio Cooperative Group says 2024 was one of its best years in decades as the company recovers from a period of losses.

“The effects of our recovery plan are accelerating,” said Pascal Houle, CEO of Sollio Cooperative Group in a news release Feb. 27.

“We’ve strengthened our financial position, boosted our operational performance, and improved our profitability. We can be pleased with our progress, but we can’t let our guard down. We need to be laser-focused on financial stability as the key to sustainable, long-term growth.”

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The co-operative will pay out $25 million in patronage refunds and dividends. It last paid patronage refunds in 2020.

Last year, Sollio returned to profitability after booking deep losses in 2022, which it attributed largely to its food division — meat processor Olymel. In 2023 Olymel dialed back hog production in Alberta and Saskatchewan and several processing plants in Ontario and Quebec, including Vallée-Jonction, Sainte-Hyacinthe and Princeville.

Lack of available labour and higher grain, labour and transportation costs were all cited as contributing to losses in 2022.

Olymel pork performance improves

Sollio called 2024 a “pivotal year” for Olymel. Net earnings reached $196.9 million, up nearly 39 per cent on the previous year.

“The year was thus marked by excellent results in pork production, helped by lower grain prices, and hence lower feeding costs,” the company said in the news release.

Fresh pork saw improved performance “thanks to operational optimization initiatives,” new customers and products.

The company’s eastern pork sector remains in a deficit, Sollio said. The devaluation of the Japanese yen was an aggravating factor.

Chilled pork product sales saw gains. In its annual report, Sollio said these value-added products are in high demand in domestic and Asian markets.

In 2024, Olymel slaughtered 6.3 million hogs, down 0.8 million from 2023 on the closure of the Vallée-Jonction slaughterhouse and closure of breeding facilities in Western Canada.

Poultry performance ‘satisfactory’

Sollio called Olymel’s poultry performance “satisfactory” despite difficult market conditions. Volumes were higher than 2023, but selling prices declined. Some turkey operations saw “a significant net loss,” the company said in its annual report, citing lower consumption in Canada and around the world which led to a market surplus.

Further processed poultry saw greater profit margins as a percentage of sales, but lower volumes led to decreased revenues.

“As with further processed pork, the difficult year in the restaurant industry impacted our results,” the company said.

A fire at Olymel’s Oakville plant in late 2024 added logistical challenges.

Sollio agriculture posts loss

Sollio agriculture posted a net loss of $3.9 million, including a loss of $3.1 million from discontinued operations.

Sales reached $2.51 billion, for a decrease of 11.7 per cent year-over-year. The company pointed to lower commodity prices and its exit from direct grain merchandizing opportunities as reasons for the decline.

However, the division saw its EBIDTA (earnings before interest, taxes, depreciation and amortization) grow based on strong performances from poultry breeding farms and hatcheries, an uptick in crops and gains on feed mill ingredients.