The Royal Canadian Mint (RCM) enjoyed another record year driven by sales in bullion, collector coins and producing coins for foreign clients.
In releasing its 2013 annual report, the RCM reported the highest revenue in its history, with revenues exceeding $3.375 billion and $48 million in pre-tax profits. In 2012 the RCM had sales of $2.583 billion and pre-tax profits of $40.7 million. Profits after taxes were $36.2 million in 2013 and $29.8 million in the previous year.
For the RCM it was a case of good news on all fronts, with increases in bullion, collector coins, and foreign circulation strikes, while Canadian circulating coins did drop from 1.1 billion coins in 2012 to 435 million in 2013, the result of the end of production of pennies, and increased efficiency in the coin distribution system managed by the Mint.
In terms of numbers, the bullion, refinery, and Exchange Traded Receipts (ETR) business line were the top performers. Bullion coins set records last year. Sales of gold maple leaf coins were up 47.7 per cent to more than 1.14 million ounces, and the sale of silver maple leaf coins increased 55.8 per cent to 28.2 million ounces. In addition to the regular maple leaf coins, the bullion department also includes the sale of limited edition and commemorative bullion coins and some special market products.
The numismatic division, which is a term used by the Mint to describe non-circulating legal tender coins, set a new record with more than 200 issues during the year and 70 of them selling out by year-end. Revenue for collector and gift coins was up 15.1 per cent to $167 million.
The financial windfall allowed the RCM to meet its longstanding goal of paying a $10 million dividend to its only shareholder, the government of Canada.
Other highlights included 12 new contracts worth $90.3 million to produce circulating and collector coins for foreign clients, and a massive increase in the volume of gold and silver being held by the RCM under the ETR program, which allows investors to purchase precious metal without taking physical possession. Among the foreign clients were China, the Philippines, Brazil, and Botswana.
The year also saw the phasing out of the one-cent coin from circulation. The last coin of that denomination was struck in 2012. According to the report, more than four billion pennies were recovered over the course of the year and melted for scrap.
Circulating Canadian coins remain part of the Mint’s core mandate, which is to produce and manage the distribution of Canada’s coins.
The change in metallic composition plated coins over recent years has reduced costs and the National Coin Committee, chaired by the Mint, monitors coin inventories across Canada to avoid coin shortages.
The distribution system is becoming more efficient because of the increase in the number of coin counting machines which returns coins to circulation faster and helps reduce hoarding.
The alloy recovery program culls out coins struck prior to the introduction of tri-plated steel coins in 2001 for recycling. In 2013 more than 1,278 tonnes of nickel and 228 tonnes of cupro-nickel were recycled, a slight reduction from the previous years as the number of older coins in circulation continues to decline.
The circulating coin program also includes a circulating commemorative coin program. According to the RCM, the program celebrates “Canada’s history, culture, and values and allows Canadians to connect with their past.” In 2013 the circulating programs included the conclusion of the War of 1812 program, and coins to commemorate the exploration and values of the Arctic.
As reported earlier, the numismatic and collectibles line saw gains on 2012’s record year.
The 200 products with 70 sellouts for last year compared well with the 136 products and 60 sellouts of the previous year.
According to the report, sales were bolstered by the installation of 200 more display towers in Canada Post outlets and a media campaign that increased the number of visitors to the Mint’s website to 6.8 million people, 76 per cent of them becoming new customers.
The line is driven by increased innovation in products, and craftsmanship.
The report indicated that the number of issues scheduled for 2014 will be more than 200. Customer acquisition programs, such as the $20 for $20 series will be expanded and future products will be created with an appeal to collectors and buyers outside of Canada.
In 2013 more than 2.6 billion coins and blanks were prepared for 17 foreign customers.
The previous year saw the Mint produce 904 million coins and blanks for 13 countries. Total revenue for the division increased 158 per cent to $78.2 million.
The report reported the huge increase was partly because an undisclosed client experienced a disruption in domestic minting capacity during the year.
The international coin market remains volatile due to decreased demand for coins in Europe, a fragile global economy, and the entry of more suppliers.
The Mint is developing new bronze and brass products, recognizing that 60 per cent of the world’s coins are various shades of yellow. Because the Canadian processes are cyanide-free, the report predicts opportunities to market its technology, including licensing to other mints.
The RCM’s flagship bullion coins, the gold and silver maple leafs, remain market leaders.
Bullion and refinery revenues increased 30 per cent to $3 billion during the year, exceeding the previous record of $2.9 billion set in 2011.
The sale of platinum coins, however, dropped from 34.7 thousand ounces in 2012 to 19.3 thousand ounces in 2013. The volume of metal held under the ETR program grew significantly, up 13 per cent during the year.