Highlights as at December 31, 2020
- Share price: $16.22, up $0.28 compared with $15.94 as at December 31, 2019
- Annual return: 2.1%
- Investments impacting the Québec economy portfolio return: 3.6%
- Other investments portfolio return: 4.8%
Montréal, February 11, 2021 - Capital régional et coopératif Desjardins (CRCD) announced that its share price today reached a new high at $16.22, up $0.28 from a year earlier. CRCD generated net earnings of $46.4 million in 2020 for an annual return of 2.1%. CRCD's net assets stood at $2,273 million as at December 31, 2020.
The second half of the year in particular saw the resumption of operations by several portfolio companies, as reflected by an increase of $1.15 in the share price compared with a price of $15.07 on June 30, 2020. Over seven years, the minimum holding period for shares of CRCD, the compounded return of the share is 4.8%[i], plus the income tax credit claimed on purchase.
The 2020 annual results stem primarily from the Investments impacting the Québec economy and Other investments portfolios, which generated returns of 3.6% and 4.8%, respectively.
Partner companies are resilient
The positive performance of the Investments impacting the Québec economy portfolio is largely a reflection of our partner companies' resilience and creativity in the face of the health crisis, especially in the second half of the year. While expectations at the end of the first six months of the year were that Québec SMEs would be hard hit by fallout from the pandemic, many reinvented themselves; in particular, optimizing production methods, reviewing business models, accelerating their digital shift and moving ahead with acquisitions.
As at December 31, 2020, CRCD and its partner funds supported 551 companies, cooperatives and funds with commitments of $1.5 billion, of which $211 million was committed in 2020.
Positive performance by the Other investments portfolio was due to significant securities weighting in the bond market, which performed well throughout the year, and during the first six months in particular. The low volatility equity funds held by CRCD did not fully benefit from the stock market rally in the second half of 2020 and ended the year with a negative return.
These results reflect the effectiveness of the financial asset management strategy adopted by CRCD several years ago to provide a more balanced overall profile and limit volatility in periods of substantial market turbulence or unfavourable events at partner companies.
Capital subscriptions during fiscal 2020 reached $140 million, while share redemptions totalled $222 million.
Fuelling Quebec's socio-economic re-opening
"While Québec is in re-opening mode, CRCD's manager, Desjardins Capital, plans to invest close to $500 million during 2021 to drive growth for SMEs and cooperatives across all regions of Québec," noted Marie-Hélène Nolet, Chief Operating Officer of Desjardins Capital. "We will continue to support our partner companies, providing patient capital and ensuring that ownership of our flagship companies remains in Québec, particularly in resource regions and regions facing economic hardship."
Shareholders reconfirm their trust
Shareholder interest in purchasing shares of the 2020 issue remained high as the maximum authorized amount was fully subscribed. By subscribing, our shareholders contribute to the vitality of Québec regions. Moreover, shareholder demand for the 2020 share exchange exceeded the authorized amount of $100 million, with applications accepted in early 2021. The pre-subscription details for the 2021 issue will be announced in a press release at a later date, and a similar process will apply for the next exchange period if CRCD is authorized to continue the exchange program.
About Capital régional et coopératif Desjardins
With more than 109,000 shareholders, Capital régional et coopératif Desjardins (CRCD) is a public company with $2,273 million in net assets. CRCD contributes to Québec economic development through several levers developed with its manager, Desjardins Capital. These levers, with CRCD as the driving force, form an entrepreneurial ecosystem designed to value and nurture the best of Québec entrepreneurship. As at December 31, 2020, through its network, CRCD supported the growth of more than 550 businesses, cooperatives and funds in various industries spanning all Québec regions. (www.capitalregional.com)
[i] The share's compound returns were 1.8% over one year, 4.8% over three years, 5.2% over five years, 4.8% over seven years and 5.0% over ten years. The indicated rates of return are the historical annual compounded total returns including changes in share value and reinvestment of all dividends or distributions, as applicable. These rates do not take into account any income taxes payable by any shareholder that would have reduced returns. CRCD shares are not guaranteed, their value fluctuates and their past performance is not indicative of their future returns. Please read the prospectus online before investing.
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