The Royal Canadian Mint has announced financial results for the first quarter of 2020 that provide insight into our activities, the markets influencing our businesses and our expectations for the next 12 months.
“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,” said Marie Lemay, President and CEO of the Royal Canadian Mint.
“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,” he added.
All monetary amounts are expressed in Canadian dollars, unless otherwise indicated.
Financial and Operational Highlights
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).
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.