With its diversified businesses maintaining profitability, the Royal Canadian Mint is on track to achieve its financial goals for the current fiscal year after announcing consolidated revenues of $1.54 billion and consolidated profit before taxes of $25.3 million in its 2016 Second Quarter Financial Report.
According to the Mint’s report, strong bullion sales continued to drive revenues, although these were partially offset by declines in Numismatics and Circulation Products and Services (CP&S) revenues.
“Under its new strategic direction, the Mint is continuing to build on its strengths and make the adjustments necessary to adapt to change and achieve lasting profitability,” said Sandra Hanington, Mint president and CEO. “The positive results of the first six months of the year show that the Mint is competing in a complex business environment and is on track to meet its 2016 financial targets.”
The Canadian Circulation Program continued to meet net demand of 1.08 billion circulation coins in Q2 2016, which is slightly lower than the 1.13 billion coins supplied during the same 2015 period. The Mint satisfied market demand through the management of inventories held at major Canadian financial institutions, recycled coins and the sale of new coins. It produced 140.1 million new coins in Q2 2016 compared to 126.9 million coins in Q2 2015. The unforeseen withdrawal of a major financial institution’s coin recycling kiosks decreased the volume of recycled coins in Q2 2016 to 762.6 million coins compared to 803.7 million during the same quarter in 2015.
The Mint’s industry-leading circulation coin solutions generated new international business in the second quarter of 2016, with five contracts from Caribbean, African and Asian customers, as well as CP&S revenues of $15.3 million, representing a 14 per cent increase compared to the same period in 2015. While CP&S revenues for the first half of 2016 declined nine per cent compared to the same 2015 period, the business is on track to achieve its 2016 target. As well, a 40 per cent decline in the volume of coins processed under the Alloy Recovery Program (ARP) and significantly lower base metal prices account for ARP revenues of only $2.7 million in Q2 2016 compared to $5.7 million generated in Q2 2015.
Strong demand for Gold and Silver Maple Leaf bullion coins drove bullion revenues in the second quarter of 2016 nearly 40 per cent higher than the same 2015 period ($678.8 million compared to $485.7 million). The Mint sold 251.4 ounces of gold coins in Q2 2016 for a 53 per cent increase over sales achieved in Q2 2015. Similarly, silver coin sales were up 24 per cent over last year, with 8.4 million ounces sold in the second quarter of 2016.
The Mint sold out 26 numismatic products in the second quarter of 2016, compared to selling out 19 products during the same 2015 period. It also continued to innovate in the field of numismatics, as demonstrated by the luminescent borosilicate glass technology of the Mint’s final coin in the 2016 $20 Fine Silver “The Universe” series. Although numismatic gold coin sales are up nearly 20 per cent in the first half of 2016 compared to the same period in 2015, Numismatics business revenues in Q2 2016 declined nine per cent, to $42.3 million, compared to Q2 2015.
According to the report, this change is largely the result of lower Q2 demand for gold and silver numismatic products and reduced sales of face value coins. Management is closely monitoring the performance of its face value program and implementing action to mitigate sales returns in the future.
To read more of the Mint’s second quarter financial report of 2016, visit mint.ca.