A Good Year for South Africa’s Producers

In its annual report for 2022-23, the South African Reserve Bank (SARB) has provided details of the financial performance of its minting and banknote printing subsidiaries South African Mint (SAM) and South African Bank Note (SABN).

Both achieved their targets for the year, with SARB spending R 28 billion on coin and note production. A significant milestone, culminating this May, was the production of an upgraded banknote series and a new coin series.

SAM achieved EBITDA of R 188.7 million, against a budget of R 83 million, an increase of 58% over the previous year. Including its subsidiary Prestige Bullion (which manufactures and sells bullion coins and in which it increased its stake from 60% to 80%), it contributed profit before tax of R 683 million to SARB, compared with R 777 million in 2021.

The key factors influencing financial performance included record sales and profit in the collectables business, driven mainly by export sales (70%) and a commodity price rally. Local demand for gold bullion remained subdued, while the export market performed in line with budget.

SAM successfully fulfilled the SARB’s full order of 800 million coins and maintained healthy buffer stocks. A key highlight, as above, was the first-time delivery of a fully refreshed coin series, the first in 34 years The order was delivered at a lower conversion cost than budget and a lower waste rate.

SABN, meanwhile, made good progress in implementing its strategy to ensure the long-term sustainability of note production at internationally competitive prices.

It delivered 1.097 billion notes, achieving a net profit before tax of R 221 million (versus R 278 million in 2021) and EBITDA of R 265 million (versus R 327 million the previous year). In doing so, it generated sufficient cash for self-funding the capital expenditure investment pipeline, which has included the upgrade of a screen-printing machine, the integration of an offline inspection system and the upgrade of banknote processing equipment to a state of the art BPS X9.

The counterfeit ratio for South African banknotes in the year the year was 2.92 ppm, compared with over 5 ppm the previous year and a target threshold of 12 ppm.