OTTAWA, March 27 /CNW Telbec/ - Export Development Canada (EDC) today
announced that its combined financing and insurance volumes reached a record
$77.7 billion in 2007, a 17.5 per cent increase over 2006.
EDC facilitated $20.8 billion in trade with emerging markets, a 37 per
cent increase over 2006. EDC was also involved in $9.6 billion in Canadian
direct investment abroad, a 39 per cent increase over 2006. More than 84 per
cent of EDC's customers were small- and medium-sized enterprises, and the
value of their business through EDC grew by 25 per cent to $18.8 billion.
"EDC's business model is designed to support a greater appetite for risk.
This enables us to deliver results for Canadian exporters at any period of the
credit cycle, but particularly so when tighter credit conditions and slower
global growth threaten their ability to compete," said President and CEO Eric
Siegel. "Canadian companies are turning to us as they work to remain
competitive amid a much higher dollar and slowing economies and their higher
risk mitigation needs have driven our strong business results."
EDC's performance is an important element within the Government of
Canada's Global Commerce Strategy. In 2007, EDC participated in nearly 15 per
cent of Canada's total exports in goods, services and investments, with that
total climbing to 38 per cent in Canada's trade and investment with emerging
markets. The transactions facilitated by EDC in 2007 are estimated to have
generated $55.6 billion of Canada's GDP or 4.5 per cent of the total. This
export and investment activity was also associated with sustaining more than
624,000 jobs, representing approximately 3.7 per cent of national employment.
Brazil, Russia and the Commonwealth of Independent States (CIS), India,
China and Mexico continue to be the priority emerging markets for Canadian
companies because of their growth rates, importance to global supply chains
and alignment with Canadian strengths. EDC business volumes in these markets
totaled more than $8 billion in 2007, up from $6.8 billion in 2006, with
notable growth in China at $1.7 billion (up 75 per cent), Russia and the CIS
at $1.6 billion (up 28 per cent) and India at $1.2 billion (up 62 per cent).
"EDC's growth in emerging markets reflects the efforts of Canadian
companies to grow their business where economies are booming and to reduce
their operating costs through foreign investments," continued Mr. Siegel. "EDC
announced four new foreign representatives this year in key emerging markets,
bringing the total number to 13 worldwide. Their work strengthens our
relationships with foreign buyers, and helps create new opportunities for
EDC's business activities were strong across most regions of Canada.
Regionally, western Canada led the country, accounting for 37 per cent of
EDC's total business volume followed by Ontario (33 per cent), Quebec (28 per
cent), and Atlantic provinces (2 per cent).
EDC's record business volume in 2007 resulted in increased exposure and
consequently higher provisioning requirements that led to a reduction in net
income. EDC's net income in 2007 was $473 million compared to $1.2 billion in
2006. EDC recorded a $328 million charge for provision for credit losses in
2007, in contrast to 2006 where there was a $376 million release of
provisions. Also contributing to the decrease in net income was a significant
reduction in the amount of debt relief received ($1 million in 2007 compared
to $260 million in 2006). Debt relief represents funds received by EDC from
the Government of Canada when it forgives the sovereign debts of highly
indebted developing countries incurred in prior years.
EDC's operating income was $801 million for 2007, below the $880 million
reported in 2006 as a result of the lower debt relief income. Excluding the
impact of debt relief, operating income actually increased by 29 per cent. The
increase is primarily the result of portfolio growth, successful airline
restructurings and a lower level of impaired loans.
As a result of EDC's 2007 business results, EDC's Board of Directors
approved the payment of a $250 million dividend to the Government of Canada.
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 forecast needs. Dividends paid by EDC to the shareholder
since 1993 total $720 million.
Other key results include:
- EDC's assets increased by 1.2 per cent to $23.1 billion from
December 31, 2006;
- The total allowance for loan-related losses and insurance claims was
$2.3 billion at December 31, 2007;
- Total paid-in capital, retained earnings (including accumulated other
comprehensive income) and allowances at December 31, 2007 were
- Impaired loans as a percentage of gross loans receivable decreased from
8.2 per cent at the end of 2006 to 3.1 per cent at December 31, 2007,
reflecting the reclassification of impaired loans to performing status
primarily within the aerospace industry;
- EDC has no investments in asset backed commercial paper, as well as no
investments in sub-prime mortgage instruments.
- Over the past three years as a result of airline bankruptcies a number
of aircraft were returned to EDC when the airlines elected to return
all or a portion of their aircraft. Four aircraft were sold in 2007 and
the remaining 54 returned aircraft have all been redeployed on leases
with various airlines;
- The number of insurance claims paid was 1,341, a 4 per cent increase
from 2006. The dollar value of those claims was $57 million compared to
$61 million in 2006;
- Administrative expenses increased by 8 per cent to $219 million from
$203 million in 2006; and
- The number of employees at December 31, 2007 was 1,068 from 1,056 in
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 nearly 7,000 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, economic analysis and has been recognized as one of Canada's Top
100 Employers for seven consecutive years.
For further information:
For further information: Media contact: Phil Taylor, Corporate
Communications, Export Development Canada, (613) 598-2904, email@example.com