OTTAWA, Sept. 7 /CNW Telbec/ - Export Development Canada (EDC) announced
today that its business volume in the first half of this year reached
$37.4 billion (all figures in Canadian dollars), a 30 per cent increase over
the same period in 2006. Almost one third of that business, $12 billion, was
in trade in emerging markets, a 58 per cent increase from last year.
"EDC's efforts to help Canadian exporters and investors in
opportunity-rich but often higher risk emerging markets is directly driving
this significant increase in our overall business volume," said Eric Siegel,
President and CEO of EDC. "These numbers are very encouraging as they show
Canadian companies are globalizing their business to compete and grow
More than 5,700 exporters and investors used EDC's products or services
in 175 countries through June 30, 2007. Eighty-five per cent of these
exporters and investors were small-to-medium sized enterprises. EDC's business
volumes in emerging markets were led by Mexico at $1.12 billion, China at
$872 million, Brazil at $637 million, Russia at $597 million, Chile at
$559 million and India at $550 million.
Companies in Ontario accounted for $13.8 billion of EDC's total business
volume (up by 47 per cent), followed by Western Canada at $13.5 billion (up by
34 per cent), Quebec at $8.8 billion (up by 12 per cent) and Atlantic Canada
at $672 million (up by two per cent).
"Heading into this year we said that EDC's strong balance sheet would
enable us to take on even greater risk, which is what EDC was designed to do,"
continued Mr. Siegel. "The six-month figures reflect our plan to grow our
presence in markets where Canadian exporters want to be but where risks are
Net income for the first half of 2007 was $208 million compared to
$305 million for the same period in 2006. This is largely due to a smaller
amount of debt relief received in 2007 compared to 2006, as well as higher
requirements for provisioning that reflect this year's increased business
volumes and the risk concentrations in EDC's portfolio.
EDC's operating income, excluding debt relief, increased by 63 per cent
in the first six months of 2007 over the same period in 2006. This is mainly
due to previously impaired aerospace loans returning to performing status in
the first half as a result of successful airline restructurings.
However, when debt relief is included, EDC's operating income has
decreased from $523 million in the first half of 2006 to $426 million for the
same period in 2007. This is due to the fact that EDC received $261 million in
debt relief in the first half of 2006 compared to $1 million received this
year. Debt relief payments occur when the Government of Canada forgives
sovereign debts to highly indebted developing countries for debts incurred in
prior years. EDC is then reimbursed for an amount equal to the debt relief
granted by the Government of Canada. These payments impact both operating and
Other key results include:
- Total assets at June 2007 were $21.9 billion, a six per cent increase
from the same point in 2006. The majority of this growth can be
attributed to the growth in EDC's loans portfolio and a decrease in the
allowance for losses on loans due to the successful airline
- Increased business volume in higher risk markets in 2007 has resulted
in an increase in EDC's provision charge to $218 million from
$34 million in 2006;
- The total allowance for loan-related losses and insurance claims at
June 30, 2007 was $2.3 billion;
- Total paid-in capital, retained earnings, and allowances at June 30,
2007 were $8.2 billion;
- Impaired loans as a percentage of gross loans receivable decreased to
$665 million or three-and-a-half per cent at June 30, 2007, compared to
$2.5 billion or 14.5 per cent a year ago reflecting continued
improvement in the aerospace industry ;
- The number of insurance claims paid was 731, a nine per cent increase
from the first six months of 2006. The dollar value of those claims was
$27 million, consistent with the value of these claims for the same
period last year; and
- Administrative expenses for the first six months of 2007 increased by
2 per cent to $99 million from $97 million for the same period in 2006.
EDC is Canada's export credit agency, offering innovative commercial
solutions to help Canadian exporters and investors expand their international
business. EDC's knowledge and partnerships are used by 6,400 Canadian
companies and their global customers in up to 200 markets worldwide each year.
EDC is financially self-sustaining and is a recognized leader in financial
reporting and economic analysis, and has been named one of Canada's Top 100
Employers for six consecutive years.
For further information:
For further information: Media contact: Phil Taylor, Public Affairs,
Export Development Canada, (613) 598-2904, email@example.com