“In 2019, employees of the Royal Canadian Mint demonstrated their ability to innovate and deliver great products while focusing on our customers,” said Marie Lemay, President and CEO of the Royal Canadian Mint. “Their hard work contributed to the Mint delivering a $40 million dividend to the Government of Canada.” Regarding 2020, she added that “the Mint capitalized on market opportunities in the first quarter. Demand for gold and silver bullion was up, refining volumes were above plan and storage volumes remained steady and healthy. In the final weeks of the quarter, the Mint responded to this unprecedented situation with COVID-19 in a proactive way that prioritizes the health and safety of our employees. We have adapted our production to be able to continue delivering critical services in support of essential sectors of the Canadian economy, while adhering to strict new protocols to ensure our work environment is a safe one.”
The financial results should be read in conjunction with the Mint’s annual report. All monetary amounts are expressed in Canadian dollars, unless otherwise indicated.
Financial and Operational Highlights 2019
- Consolidated profit before income tax and other items exceeded the Mint’s financial target in its Corporate Plan, but decreased 8% to $42.3 million for the year (2018 – $46.0 million).
- Consolidated profit for the period remained consistent year over year at $35 million.
- Consolidated revenue increased to $1,453.4 million in 2019 (2018 – $1,420.6 million) as the Mint was able to capitalize on the higher demand for silver bullion products in certain regions outside of North America, particularly in the second half of 2019.
- Silver bullion volumes were 22.8 million ounces (2018 – 18.4 million ounces), while gold bullion volumes were 483.0 thousand ounces (2018 – 523.0 thousand ounces).
- Sales of numismatic products were consistent year to year at $117 million as revenue from gold products increased, while a more streamlined product offering reduced the revenue from silver and other product sales.
- Revenue from the Foreign Circulation business decreased 31% to $65.4 million (2018 – $94.9 million), a more normal level as compared to the exceptional year in 2018, with production and/or shipments returning to normal levels at 1,308 million foreign coins and blanks compared to 1,816 million coins and blanks in 2018.
- The Mint continues to actively manage Canadian circulation coin inventory levels to ensure coinage demand is met throughout the year, and, in 2019, produced 385 million coins (2018 – 369 million) to replenish inventories held on behalf of the Department of Finance.
- Operating expenses, overall, increased 1% year over year to $94.5 million (2018 – $93.8 million) as the Mint continued to focus on cost optimization through the implementation of its updated numismatics strategy and at the same time increased its investment in employees to support the ongoing diligence with respect to the Mint’s physical and cyber-security posture in 2019.
- Cash and cash equivalents remained consistent year over year at $66 million after the Mint declared and paid a $40 million dividend to its Shareholder, the Government of Canada, in 2019, $30 million more than the dividend paid in 2018. Cash and cash equivalents remain at the level required to support the Mint’s ongoing operations.
Consolidated results and financial performance
(in CAD $ millions for the years ended December 31, 2019 and 2018)
| Year ended | ||||
| December 31, 2019 | December 31, 2018 | $ change | % change | |
| Revenue | 1,453.4 | 1,420.6 | 32.8 | 2 |
| Profit before income tax and other items (1) | 42.3 | 46.0 | (3.7) | (8) |
| Profit before income tax and other items margin | 2.9% | 3.2% | ||
| Profit for the period | 34.8 | 35.1 | (0.3) | (1) |
(1) A reconciliation from profit for the period to profit before income tax and other items is included on page 29 of the Mint’s 2019 annual report.
| As at | ||||
| December 31, 2019 | December 31, 2018 | $ change | % change | |
| Cash and cash equivalents | 65.5 | 66.4 | (0.9) | (1) |
| Inventories | 94.9 | 62.2 | 32.7 | 53 |
| Capital assets | 173.9 | 172.8 | 1.1 | 1 |
| Total assets | 429.9 | 397.8 | 32.1 | 8 |
| Working capital | 102.5 | 107.5 | (5.0) | (5) |
Financial and Operational Highlights Q1 2020
- In response to the COVID-19 pandemic, the Mint modified its operations and production to focus on delivering critical services in support of the essential mining and financial sectors, and international supply chains. The resulting reduction in operations and production across all of the Mint’s businesses impacted revenue and profitability in first quarter of 2020.
- Consolidated profit before income tax and other items was $6.5 million for the quarter (2019 – $10.8 million).
- Consolidated profit was $1.7 million for the quarter (2019 – $7.7 million).
- Consolidated revenue increased to $498.4 million in the first quarter of 2020 (2019 – $350.7 million). Overall, global market demand for bullion, due to the economic uncertainty surrounding COVID-19, led to higher bullion volumes.
- Gold volumes were 198.1 thousand ounces (2019 – 123.8 thousand), while silver volumes were 6.6 million ounces (2019 – 5.5 million).
- Sales of numismatic products were behind 2019, having decreased to $21.3 million (2019 – $27.3 million) due to a smaller, more resonant product portfolio in 2020.
- Foreign circulation revenue increased 31% year over year with production and shipment of 265 million foreign coins and blanks, compared to 194 million coins in 2019.
- Canadian circulation coins sold to the Department of Finance were 53 million pieces in the quarter (2019 – 32 million pieces).
- Overall operating expenses remained consistent quarter over quarter at $22 million.
- Cash and cash equivalents increased to $83.1 million at March 28, 2020 (December 31, 2019 – $65.5 million).
Consolidated results and financial performance
(in CAD $ millions)
| 13 weeks ended | ||||
| March 28, 2020 | March 30, 2019 | $ change | % change | |
| Revenue | 498.4 | 350.7 | 147.7 | 42 |
| Profit before income tax and other items (1) | 6.5 | 10.8 | (4.3) | (40%) |
| Profit before income tax and other items margin | 1.3% | 3.1% | ||
| Profit for the period | 1.7 | 7.7 | (6.0) | (78%) |
(1) A reconciliation from profit for the period to profit before income tax and other items is included on page 29 of the Mint’s 2019 annual report.
| As at | ||||
| March 28, 2020 | December 31, 2019 | $ change | % change | |
| Cash and cash equivalents | 83.1 | 65.5 | 17.6 | 27 |
| Inventories | 50.8 | 94.9 | (44.1) | (46) |
| Capital assets | 170.1 | 173.9 | (3.8) | (2) |
| Total assets | 400.0 | 429.9 | (29.9) | (7) |
| Working capital | 110.8 | 102.5 | 8.3 | 8 |
The Mint is expecting to return to full production in the second quarter as it implements further safety measures to allow for a higher number of employees in its production facility per shift and it increases the number of shifts to accommodate the entire workforce. As part of its business continuity plan, the Mint is actively monitoring its global supply chain and logistics networks in support of its continued operations. Despite its best efforts, the Mint expects COVID-19 to continue to affect its performance over the balance of 2020.
For more information, visit the Royal Canadian Mint website.
Here you can read the Royal Canadian Mint’s financial results for 2018.
In 2019 the Mint appointed Marie Lemay as new Master of the Royal Canadian Mint.
