EDC 2014 results: Canadian companies do more in emerging markets and make more foreign investments

OTTAWA, April 1, 2015 /CNW/ - As Canadian exports grew by an estimated 5.7% in 2014, more than 7,400 Canadian exporters and investors used EDC's products and services to undertake $98.9 billion in international business.

In line with Canada's export growth, EDC's customers increased 3.7% and business facilitated increased 3.6% compared to 2013. The commercial Crown Corporation is the leading provider of financing and insurance for Canadian companies engaging in international trade, and with approximately 25% of Canada's export trade supported by its services, EDC's business results reflect the pulse of the nation's international business.

EDC released highlights of its 2014 corporate results today following the first meeting of the Board of Directors of 2015. A complete Annual Report will be released in the second quarter.

"The upward turn we saw in Canadian trade and EDC business in 2013 has continued into 2014 and we are cautiously optimistic that we are seeing the start of the next export growth cycle in Canada. Even amidst the recent drop in oil prices, we continue to see positive signs and believe that the underlying trends remain solid," said Benoit Daignault, President and CEO, EDC.

The services that EDC provides to Canadian exporters are an important contributor to the trade objectives of the Global Markets Action Plan.

"Trade accounts for nearly 60% of Canadian GDP, so the Canadian exporter figures prominently in the national economy," Daignault said. "Despite a still-muddled global business climate, Canadian exporters and investors have proven themselves very adept at finding new business amid continued global economic challenges."

Central to EDC's business focus are the following four key areas that bring the greatest value to Canadian exporters and investors:

  • providing a broad financial toolkit for small- and medium-sized exporters
    • 4.5% increase in new SME customers, reaching 6,110
    • 4.7% increase in small business transactions, reaching 2,762
    • 12.4% increase in total business facilitated for SME customers, reaching $14 billion
    • 23.8% of that business was in emerging markets
  • enabling Canadian business in emerging markets
    • 6% increase in business facilitated, reaching $28.9 billion
    • Canadian companies access 146 emerging markets using EDC's services
  • facilitating Canadian direct investment abroad, and
    • 14.3% increase in the total volume of Canadian foreign investment that EDC helped facilitate, reaching $7.5 billion
  • creating opportunities to connect Canadian companies with foreign buyers.
    • EDC led 11 matchmaking events in 2014 that resulted in 846 introductions between foreign buyers and 395 Canadian suppliers
    • EDC develops relationships with large foreign companies with supply chain opportunities that match up well with Canadian capabilities. These relationships supported procurement from more than 1,800 Canadian exporters in 2014, 91% of whom were SMEs.

In addition, EDC also provides financial services to large Canadian and foreign companies with significant supply chains inside Canada. In so doing, EDC looks to leverage the presence of these anchor companies towards bringing along with them their smaller Canadian suppliers into new markets.

"With a 21% increase in total transactions, 17% increase in financing and a 14% increase in support for foreign investments, we're seeing more Canadian companies getting into the trade game with a longer-term plan," added Daignault. "We see this as a positive sign for Canada's future prosperity."

Key Performance and Financial Results

"We had record new loan signings of $21.6 billion in 2014, and we facilitated $77 billion of activity in our insurance programs, indicating growing trade activity among Canadian companies and their international customers," said Ken Kember, Chief Financial Officer and Senior Vice-President, Finance, EDC. "From a financial performance perspective, 2014 was a solid year with $1.1 billion in income."

  • EDC customers protected more than $56 billion of their international sales with our credit insurance ($56 billion in 2013), more than $11.4 billion in insurance products used by financial institutions ($10.6 billion in 2013), $7.2 billion in bonding ($7.5 billion in 2013), and more than $2.6 billion in political risk insurance ($2.7 billion in 2013) to help protect their foreign investments.
  • EDC's financing customers, of which 60% were SMEs, signed 1,084 financing transactions with a value of $21.6 billion, an increase of 18% over 2013. More than 90% of these transactions were undertaken in partnership with private-sector financial institutions.
  • More than 5,200 Canadian companies insured over $77 billion in export contracts with EDC, covering nearly 78,000 buyers, obligors and banks in nearly 190 foreign markets.
  • EDC finished the year with net income of $1.1 billion, an increase of $312 million over 2013. While our net revenue from operations remained stable with 2013, we saw additional income in 2014 mainly as a result of the volatility associated with our financial instruments carried at fair value. Also, upward credit migration in our loan portfolio led to a reversal of provision for credit losses in 2014, whereas in 2013 we experienced downward credit migration and a provision charge.
  • EDC's Board of Directors approved the payment of a $1.129 billion dividend to the Government of Canada during the 2014 calendar year. The payment was made under EDC's Capital Adequacy Policy, which allows the Board of Directors to consider a dividend payment when the Corporation's capital exceeds its forecasted needs. Dividends paid by EDC to the Government of Canada now total $4.139 billion against the Government's total historical investment of $1.33 billion.
  • The trade and investment facilitated by EDC in 2014 supported the equivalent of $68.0 billion in Canadian GDP and 719,200 jobs. This represents 3.9% of total Canadian GDP and 4.0% of national employment. For every $1 of income earned in Canada during 2014, $.039 (or 4 cents) is attributable to EDC's trade and investment facilitation.

All figures are CAD unless otherwise noted.

About EDC

EDC is Canada's trade finance agency, providing financing and insurance solutions locally and around the world to help Canadian companies of any size respond to international business opportunities. As a profitable Crown corporation that operates on commercial principles, EDC works together with private- and public-sector financial institutions to create greater capacity for Canadian companies to engage in trade and investment.

For more information about how EDC can help your company, visit www.edc.ca

 

SOURCE Export Development Canada

For further information: Phil Taylor, Export Development Canada, E-mail: ptaylor@edc.ca, Phone: 613-598-2904

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