Readers are referred to the sections "Non-IFRS Financial Measures and Presentation" and "Forward-Looking Statements" at the end of this release.
Power Financial
Consolidated results for the period ended
Highlights
- On
December 13, 2019 ,Power Corporation of Canada (Power Corporation ) and Power Financial announced a reorganization transaction pursuant to which each common share of the Corporation (PFC Common Shares) held by holders of PFC Common Shares other thanPower Corporation and certain of its affiliates, were exchanged for 1.05 Subordinate Voting Shares ofPower Corporation and$0.01 in cash. - The reorganization was completed on
February 13, 2020 .Power Corporation now holds 100% of the issued and outstanding PFC Common Shares. Power Financial preferred shares and debt securities remain outstanding. Power Financial's common shares "PWF" were delisted onFebruary 18, 2020 . - The Corporation's net asset value per share was
$39.86 atDecember 31, 2019 , compared with$32.96 atDecember 31, 2018 , representing an increase of 20.9%. Great-West Lifeco (Lifeco) declared a quarterly common dividend of$0.4380 per common share payableMarch 31, 2020 , a 6% increase from the previous quarter.- Lifeco's consolidated assets under administration at
December 31, 2019 grew to over$1.6 trillion , a 16% increase fromDecember 31, 2018 . IGM Financial Inc. (IGM) reported record high assets under management atDecember 31, 2019 of$166.8 billion , an increase of 11.9% from the prior year driven by favourable investment returns. Assets under administration of$190.2 billion increased by 11.8% from the prior year.Parjointco N.V. andPargesa Holding SA (Pargesa ) announced onMarch 11, 2020 a public exchange offer for allPargesa shares not held byParjointco to be exchanged for Groupe Bruxelles Lambert (GBL) shares. The transaction is subject to shareholder approvals.Pargesa to be delisted upon completion of the transaction.
COVID-19
Since
Fourth Quarter
Net earnings attributable to common shareholders were
Adjusted net earnings attributable to common shareholders (a non-IFRS financial measure, see Non-IFRS Financial Measures and Presentation below) were
Contributions to Power Financial's net earnings per share and adjusted net earnings per share were:
2019 | 2018 | |||||
(in dollars per Power Financial share) | Net Earnings [1] | Adjusted Net | Net Earnings | Adjusted Net | ||
· Lifeco [2] | 0.51 | 0.74 | 0.67 | 0.67 | ||
· IGM | 0.17 | 0.18 | 0.15 | 0.15 | ||
· | 0.04 | 0.08 | (0.05) | (0.07) | ||
· Power Financial Corporate and Other | (0.12) | (0.11) | (0.10) | (0.10) | ||
0.60 | 0.89 | 0.67 | 0.65 |
[1] | The Corporation completed a substantial issuer bid in the second quarter of 2019 and repurchased 7.0% of its common shares. |
[2] | As a result of the Corporation's participation in Lifeco's substantial issuer bid, in the second quarter of 2019, the number of shares held by the Corporation decreased by 7.4%. |
Other items in 2019, not included in adjusted net earnings, were a net charge of
Twelve months
Net earnings attributable to common shareholders were
Adjusted net earnings attributable to common shareholders were
Contributions to Power Financial's net earnings per share and adjusted net earnings per share were:
2019 | 2018 | |||||
(in dollars per Power Financial share) | Net Earnings [1] | Adjusted Net | Net Earnings | Adjusted Net | ||
· Lifeco [2] | 2.33 | 2.75 | 2.81 | 2.86 | ||
· IGM | 0.67 | 0.69 | 0.63 | 0.65 | ||
· | 0.28 | 0.34 | 0.07 | 0.05 | ||
· Power Financial Corporate and Other | (0.39) | (0.38) | (0.36) | (0.36) | ||
2.89 | 3.40 | 3.15 | 3.20 |
[1] [2] See notes above. |
Other items, not included in adjusted net earnings, were a net charge of
Results for the period ended
Fourth Quarter
Net earnings attributable to common shareholders were $513 million or
Adjusted net earnings attributable to common shareholders were
Twelve Months
Net earnings attributable to common shareholders were
Adjusted net earnings attributable to common shareholders were
Fourth Quarter
Net earnings available to common shareholders were
Adjusted net earnings available to common shareholders were
Assets under management at
Twelve Months
Net earnings available to common shareholders were
Adjusted net earnings available to common shareholders were
Fourth Quarter
Adjusted net earnings were SF139 million, compared with SF57 million in 2018. Other items, not included in adjusted net earnings, were a charge of SF64 million in the fourth quarter and were comprised of
Twelve Months
Net earnings were SF391 million, compared with SF361 million in 2018.
Adjusted net earnings were SF492 million, compared with SF317 million in 2018. Other items in 2019 were SF101 million and, in addition to the items detailed above, included restructuring and other charges at Imerys. Other items in 2018 were a positive earnings impact of SF44 million.
Power Financial's IAS 39 adjustment to
Dividends on Power Financial Preferred Shares
The Board of Directors today declared quarterly dividends on the Corporation's preferred shares.
Dividends payable
Series – Stock Symbol | Amount |
Series A – PWF.PR.A | Floating rate [1] |
[1] | Equal to one quarter of 70% of the average prime rate of two major Canadian chartered banks for the period |
Dividends payable
Series | Stock Symbol | Amount | Series | Stock Symbol | Amount |
Series D | PWF.PR.E | 34.375¢ | Series O | PWF.PR.O | 36.25¢ |
Series E | PWF.PR.F | 32.8125¢ | Series P | PWF.PR.P | 14.4125¢ |
Series F | PWF.PR.G | 36.875¢ | Series Q | PWF.PR.Q | 20.1575¢ |
Series H | PWF.PR.H | 35.9375¢ | Series R | PWF.PR.R | 34.375¢ |
Series I | PWF.PR.I | 37.50¢ | Series S | PWF.PR.S | 30¢ |
Series K | PWF.PR.K | 30.9375¢ | Series T | PWF.PR.T | 26.3438¢ |
Series L | PWF.PR.L | 31.875¢ | Series V | PWF.PR.Z | 32.1875¢ |
About Power Financial
Power Financial, a wholly owned subsidiary of
At
- 66.9% –
Great-West Lifeco (TSX: GWO) www.greatwestlifeco.com - 62.1% –
IGM Financial (TSX: IGM) www.igmfinancial.com - 27.8% –
Pargesa Holding (SIX: PARG) www.pargesa.ch - 84.9% –
Wealthsimple Financial Corp. [1] www.wealthsimple.com
[1] Undiluted equity interest held by Lifeco, IGM and the Corporation. |
Earnings Summary | ||||
Earnings | ||||
(unaudited) | Three months ended | Twelve months ended | ||
(in millions of Canadian dollars) | ||||
2019 | 2018 | 2019 | 2018 | |
Adjusted net earnings | ||||
Lifeco [1] | 492 | 480 | 1,864 | 2,040 |
IGM [1] | 116 | 105 | 465 | 462 |
56 | (53) | 230 | 39 | |
664 | 532 | 2,559 | 2,541 | |
Corporate operations [2] | (38) | (38) | (114) | (121) |
Dividends on perpetual preferred shares | (35) | (34) | (139) | (138) |
Adjusted net earnings [3] | 591 | 460 | 2,306 | 2,282 |
Other items – see below | (190) | 18 | (342) | (37) |
Net earnings [3] | 401 | 478 | 1,964 | 2,245 |
Earnings per Share | ||||
(unaudited) | Three months ended | Twelve months ended | ||
(in dollars per share) | ||||
2019 | 2018 | 2019 | 2018 | |
Adjusted net earnings per share - basic | ||||
Lifeco [1] | 0.74 | 0.67 | 2.75 | 2.86 |
IGM [1] | 0.18 | 0.15 | 0.69 | 0.65 |
0.08 | (0.07) | 0.34 | 0.05 | |
1.00 | 0.75 | 3.78 | 3.56 | |
Corporate operations [2] | (0.06) | (0.05) | (0.17) | (0.17) |
Dividends on perpetual preferred shares | (0.05) | (0.05) | (0.21) | (0.19) |
Adjusted net earnings per share [3] | 0.89 | 0.65 | 3.40 | 3.20 |
Other items – see below | (0.29) | 0.02 | (0.51) | (0.05) |
Net earnings per share [3] | 0.60 | 0.67 | 2.89 | 3.15 |
[1] | The contributions from Lifeco and IGM include an allocation of the results of |
[2] | Includes operating expenses, financing charges, depreciation, income taxes, interest on cash and cash equivalents, foreign exchange gains (losses) and income (losses) from investments. |
[3] | Attributable to common shareholders. |
Other Items | ||||
(unaudited) | Three months ended | Twelve months ended | ||
(in millions of Canadian dollars, except per share amounts) | ||||
2019 | 2018 | 2019 | 2018 | |
Share of Lifeco's other items: | ||||
Net charge on the sale of | − | − | (134) | − |
Net charge on the revaluation of a deferred tax asset | (133) | − | (133) | − |
Restructuring charges | (24) | − | (24) | (38) |
Net gain on the Scottish Friendly Assurance Society Limited transaction | 6 | − | 6 | − |
Share of IGM's other items | − | − | − | (1) |
(151) | − | (285) | (39) | |
Per share | (0.23) | − | (0.42) | (0.05) |
Share of IGM's other items: | ||||
Restructuring and other charges | − | − | − | (10) |
Premium paid on early redemption of debentures | − | − | − | (5) |
Share of Lifeco's other items | (6) | − | (11) | (1) |
(6) | − | (11) | (16) | |
Per share | (0.01) | − | (0.02) | (0.02) |
Share of | ||||
Imerys – Disposal of roofing activity | − | 86 | − | 86 |
Imerys – Impairments, restructuring charges and other | (11) | (68) | (18) | (68) |
Parques and other charges | (13) | − | (19) | − |
(24) | 18 | (37) | 18 | |
Per share | (0.04) | 0.02 | (0.06) | 0.02 |
Corporate operations | ||||
Reorganization charges | (9) | − | (9) | − |
Per share | (0.01) | − | (0.01) | − |
(190) | 18 | (342) | (37) | |
Per share | (0.29) | 0.02 | (0.51) | (0.05) |
Contribution to Power Financial's Adjusted Net Earnings | |||
Three months ended (unaudited) (in millions of Canadian dollars) | Contribution to adjusted net earnings as reported | Consolidation entries [1] | Contribution to Power Financial's adjusted net earnings |
Lifeco | 495 | (3) | 492 |
IGM | 125 | (9) | 116 |
51 | 5 | 56 |
Twelve months ended (unaudited) (in millions of Canadian dollars) | Contribution to adjusted net earnings as reported | Consolidation entries [1] | Contribution to Power Financial's adjusted net earnings |
Lifeco | 1,869 | (5) | 1,864 |
IGM | 473 | (8) | 465 |
181 | 49 | 230 |
[1] | The contributions from Lifeco and IGM include an allocation of the results of |
Adjustments to
Power Financial has deferred the adoption of IFRS 9 and continues to apply IAS 39. The following table presents adjustments to the contribution of
(unaudited) | 2019 | ||||
(in millions of Canadian dollars) | Q4 | Q3 | Q2 | Q1 | Total |
Partial disposal of interest in adidas [1] | − | − | 53 | 18 | 71 |
Partial disposal of interest in LafargeHolcim Ltd [1] | 24 | − | − | − | 24 |
Impairment charges on | − | − | (13) | − | (13) |
Disposal of private equity funds | − | 1 | − | − | 1 |
Reversal on unrealized gains (losses) on private equity funds and other [2] | (19) | (6) | (3) | (6) | (34) |
Total | 5 | (5) | 37 | 12 | 49 |
[1] | On |
[2] |
Net Asset Value
Net asset value represents management's estimate of the fair value of the common shareholders' equity of the Corporation. Net asset value is the fair value of Power Financial's non-consolidated assets less its net debt and preferred shares.
(in millions of Canadian dollars, except per share mounts) | ||||||
Non-consolidated balance sheet | Fair value adjustment | Net asset | Non-consolidated balance sheet | Fair value adjustment | Net asset | |
Assets | ||||||
Investments | ||||||
Lifeco [1] | 13,654 | 6,976 | 20,630 | 15,088 | 3,780 | 18,868 |
IGM | 2,720 | 2,795 | 5,515 | 2,688 | 1,902 | 4,590 |
3,954 | (1,413) | 2,541 | 3,291 | (983) | 2,308 | |
Other | 203 | 127 | 330 | 184 | 90 | 274 |
Cash and cash equivalents | 1,021 | − | 1,021 | 1,025 | − | 1,025 |
Other assets | 138 | − | 138 | 115 | − | 115 |
Total assets | 21,690 | 8,485 | 30,175 | 22,391 | 4,789 | 27,180 |
Liabilities and preferred shares | ||||||
Debentures | 250 | − | 250 | 250 | − | 250 |
Other liabilities | 625 | − | 625 | 561 | − | 561 |
Perpetual preferred shares | 2,830 | − | 2,830 | 2,830 | − | 2,830 |
Total liabilities and preferred shares | 3,705 | − | 3,705 | 3,641 | − | 3,641 |
Net value | ||||||
Common shareholders' equity / Net asset value | 17,985 | 8,485 | 26,470 | 18,750 | 4,789 | 23,539 |
Per share | 27.08 | 39.86 | 26.26 | 32.96 |
[1] | As a result of the Corporation's participation in Lifeco's substantial issuer bid in the second quarter of 2019, the number of shares held by the Corporation decreased by 7.4% or 49,318,032 from 669,568,064 to 620,250,032 (equity interest decreased from 67.8% to 66.8%). |
Power Financial's net asset value per share was
Non-IFRS Financial Measures and Presentation
Net earnings attributable to common shareholders are comprised of:
- Adjusted net earnings attributable to common shareholders; and
- Other items, which include the after-tax impact of any item that in management's judgment would make the period-over-period comparison of results from operations less meaningful. Other items include the Corporation's share of items presented as Other items by a subsidiary or a jointly controlled corporation.
Management uses these financial measures in its presentation and analysis of the financial performance of Power Financial and believes that they provide additional meaningful information to readers in their analysis of the results of the Corporation. Adjusted net earnings, as defined by the Corporation, assist the reader in comparing the current period's results to those of previous periods as items that are not considered to be part of ongoing activities are excluded from this non-IFRS financial measure.
Adjusted net earnings attributable to common shareholders and adjusted net earnings per share are non-IFRS financial measures that do not have a standard meaning and may not be comparable to similar measures used by other entities.
The Corporation also uses a non-consolidated basis of presentation to present and analyze its results whereby the Corporation's interests in Lifeco, IGM,
Net asset value is commonly used by holding companies to determine their value. Net asset value is the fair value of Power Financial's non-consolidated assets less its net debt and preferred shares. The investments held in public entities (Lifeco, IGM and
This news release may also contain other non-IFRS financial measures which are publicly disclosed by the Corporation's subsidiaries such as sales, assets under management and assets under administration. Refer to the "Non-IFRS Financial Measures and Presentation" section of the Corporation's most recent Management's Discussion and Analysis for the definition of non-IFRS financial measures and their reconciliation with IFRS financial measures.
Eligible Dividends
For purposes of the Income Tax Act (
Forward-Looking Statements
Certain statements in this news release, other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect the Corporation's current expectations, or with respect to disclosure regarding the Corporation's public subsidiaries, reflect such subsidiaries' disclosed current expectations. Forward-looking statements are provided for the purposes of assisting the reader in understanding the Corporation's financial performance, financial position and cash flows as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future and the reader is cautioned that such statements may not be appropriate for other purposes. These statements may include, without limitation, statements regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of the Corporation and its subsidiaries, including the fintech strategy, as well as the outlook for North American and international economies for the current fiscal year and subsequent periods. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "anticipates", "plans", "believes", "estimates", "seeks", "intends", "targets", "projects", "forecasts" or negative versions thereof and other similar expressions, or future or conditional verbs such as "may", "will", "should", "would" and "could".
By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, many of which are beyond the Corporation's and its subsidiaries' control, affect the operations, performance and results of the Corporation and its subsidiaries and their businesses, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to: the impact or unanticipated impact of general economic, political and market factors in
The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements. Information contained in forward-looking statements is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management's perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances, including that the list of factors in the previous paragraph, collectively, are not expected to have a material impact on the Corporation and its subsidiaries. While the Corporation considers these assumptions to be reasonable based on information currently available to management, they may prove to be incorrect.
Other than as specifically required by applicable Canadian law, the Corporation undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.
Additional information about the risks and uncertainties of the Corporation's business and material factors or assumptions on which information contained in forward-looking statements is based is provided in its disclosure materials, including its most recent Management's Discussion and Analysis and Annual Information Form, filed with the securities regulatory authorities in
SOURCE
© Canada Newswire, source