A full review of the RCM’s 2020 annual report will be published in CCN Vol. 59 #5.
The Royal Canadian Mint has published its 2020 annual report, “Year of the Pivot,” looking back at the unprecedented previous year plus the Crown corporation’s expectations for the following 12 months.
In 2020, the mintages of four of Canada’s five common circulation denominations – everything except the 25-cent coin – decreased by a substantial amount. From 2019 to 2020, the mintages for the $2 dropped from 25.995 million to 17.235 million; the $1 dropped from 26.670 million to 15.636 million; the 10 cents dropped from 159.775 million to 68.750 million; and the five cents dropped from 92.736 million to 31.752 million. The 25 cents, the only denomination to see increased production, jumped from 80.160 million to 96 million.
“In the early months of the pandemic, there was a sudden decline in the use of cash across the country with requirements for new coins rebounding through the summer and fall,” wrote Mintmaster Marie Lemay, the Crown corporation’s president and CEO since 2019, in the annual report. “This accelerated decline highlighted the unique and valuable service the Mint provides to Canada and Canadians in support of trade and commerce through its Coin Circulation Management System. In addition to producing Canada’s circulation coins, the Mint also manages the coins that are already in circulation, ensuring that there are no shortages and that coins are available when and where Canadians want or need to use them.
“The valuable data, knowledge and insights gained from the Mint’s real-time inventory management system will support a seamless transition as Canada and Canadians move to a ‘cash-light’ economy and will help Canada be well-positioned for resilience in the event of a natural disaster or the widespread outage of e-payment systems.”
Last year also saw the Mint produce more than double the volume of gold and 30 per cent more silver than in 2019—something that required workplace modifications to ensure production could safely continue.
“In 2020, employees of the Royal Canadian Mint demonstrated their ability to innovate and deliver great products in a very challenging operating environment,” said Lemay. “Their hard work contributed to the Mint’s success. Employees pivoted quickly in the face of disruption allowing the Mint to generate strong profits.”
Lemay also highlighted “one very special initiative” – the recognition medal – which honoured frontline workers while raising money for the Breakfast Club of Canada’s COVID-19 emergency fund.
“Employees donated their time to this project and thanks to their generosity and the contributions of thousands of Canadians, the Mint was able to make a $400,000 donation to the Breakfast Club in 2020,” she said.
Last year, the Mint also used existing materials and retooled part of its operations to produce face shields and hand sanitizer for regional health authorities in Manitoba, Ontario and Québec.
“The Mint continues to respond to the 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 the essential mining and financial sectors while adhering to strict new protocols to ensure our work environment is a safe one.”
FINANCIAL & OPERATIONAL HIGHLIGHTS
The Mint saw its revenue increase by 74 per cent in 2020 as a result of what it called “exceptionally strong global market demand for bullion.”
Consolidated profit before income tax and other items was $27.5 million for the year (compared to $42.3 million in 2019).
“Higher bullion volumes sold in 2020 increased the Mint’s revenue and cost of sales proportionately; however, the Mint’s profit margin was impacted in 2020 by lower revenue from its other businesses, without a corresponding decrease in costs,” according to a statement issued today by the Mint. “In particular, the Mint continued to pay its employees and did not reduce any fixed costs during the periods of suspended or modified production as a result of the pandemic impacting the Mint’s profit margin in 2020 by approximately $6 million.”
Consolidated revenue increased to $2,527.6 million in 2020 (compared to $1,453.4 million in 2019):
- Gold bullion volumes increased more than 100 per cent year over year and were 982.8 ounces (compared to 483,000 ounces in 2019) while silver bullion volumes were 29.5 million ounces (compared to 22.8 million ounces in 2019).
- Sales of numismatic products decreased to $91.9 million in 2020 (compared to $116.8 million in 2019) due mainly to the temporary suspension of numismatic product production as a result of COVID-19 in 2020, the Mint said.
- Revenue from the Mint’s foreign circulation business decreased two per cent to $64.2 million (compared to $65.4 million in 2019) with production and shipments of 838 million coins in 2020 and blanks compared to 1,308 million coins and blanks in 2019.
- Canadian circulation coins produced and sold to the finance department for inventory were 229 million pieces in 2020 (compared to 385 million pieces in 2019) while coins sold to financial institutions to meet demand decreased eight per cent year over year.
Overall operating expenses increased four per cent year over year to $98.5 million (compared to $94.5 million in 2019) as the Mint focused on “enhanced organizational resiliency in 2020 and the development of its updated long-term strategic vision and the strategy for the Mint’s future business transformation,” it said in today’s statement.
Cash and cash equivalents increased to $67.3 million (compared to $65.5 million on Dec. 31, 2019) after the Mint declared and paid a $20 million dividend to its shareholder, the Government of Canada, in 2020.
“Cash and cash equivalents remain at the level required to support the Mint’s operations.”
Despite its best efforts, the Mint expects COVID-19 to continue to affect its performance in 2021, the Crown corporation added.
To read the Mint’s full 2020 annual report, click here.