The Royal Canadian Mint has reported its financial results for the year ended December 31, 2016. The contents of this release should be read in conjunction with the Company’s Annual Report available at www.mint.ca. All monetary amounts are expressed in Canadian dollars unless otherwise indicated.
“We are encouraged by the profitability achieved in 2016 as we continue to execute our new business strategy with the help of our talented employees,” said Sandra L. Hanington, President and CEO of the Royal Canadian Mint. “Strong results in our Bullion and Circulation Products and Solutions businesses offset a year of transition in our Numismatics business, which is renewing its customer focus with an exciting collector coin offering which strongly complements our Canada 150 circulation coin program.”
Financial and Operational Highlights
- Consolidated profit before taxes and impairment increased to $32.9 million for the year (2015 – $27.1 million)
- Consolidated profit after taxes increased to $24.5 million for the year (2015 – loss of $28.3 million)
- Consolidated revenue increased to $2,641.4 million (2015 – $2,305.1 million)
- Reduced availability of recycled coins resulted in increased Canadian coin production – 533 million pieces in the year (2015 – 350 million pieces)
- Shipment of 1,573 million foreign coins and blanks in the year (2015 – 1,185 million)
- Higher overall bullion demand contributed to higher bullion volumes and related revenues for the year. Gold volumes were 1,071.3 thousand ounces (2015 – 1,036.7 thousand) while silver volumes were 34.7 million ounces (2015 – 36.1 million).
- Sales of numismatic gold products decreased 6% and sales of numismatic silver products decreased 13% in the year compared to 2015, resulting in a decrease in revenue of $6.2 million as we shift our focus from face value to core collector coins.
- Operating expenses for the year declined 4% to $138.2 million (2015 – $144.3 million) after adjusting for impairment
- In 2016, the Mint declared and paid a dividend to the Government of Canada in the amount of $31.0 million. The payment of the dividend was the primary driver in the reduction of cash to $114.2 million at December 31, 2016 from $140.8 million at December 31, 2015.
Consolidated Results and Financial Performance
(in CAD $ millions for the years ended December 31, 2016 and 2015)
As mentioned in our third quarter 2016 earnings release on February 24, 2017, in the course of the preparation of the condensed consolidated financial statements for the quarter ended October 1, 2016, the Mint identified adjustments relating to prior periods requiring restatement, relating to the sale of numismatic face value products. In the past, these transactions were recorded as revenue along with a provision for expected returns. Upon further investigation, it was determined that revenue should not be recognized until a reasonable estimate of redemptions and returns can be made. Accordingly, a liability representing the cumulative value of unredeemed/unreturned face value products and the costs of redemptions and returns, net of the value of the corresponding silver content, was recorded in 2016 with retrospective adjustment to the inception of the face value program.
On a separate matter, the Mint has retrospectively adjusted its presentation of revenues and costs associated with bullion sales. The Mint now records revenues and costs on a net basis for all sales where both the supplier of key precious metals and customer of the bullion are the same party. This change in presentation has no impact on profit (loss).
To read more of the Mint’s Annual Report for 2016, please visit www.mint.ca.
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About the Royal Canadian Mint
The Royal Canadian Mint is the Crown Corporation responsible for the minting and distribution of Canada’s circulation coins. An ISO 9001-2008 certified company, the Mint is recognized as one of the largest and most versatile mints in the world, offering a wide range of specialized, high quality coinage products and related services on an international scale. For more information on the Mint, its products and services, visit www.mint.ca.
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