POWER FINANCIAL CORPORATION November 13, 2015
All figures are in Canadian dollars unless otherwise noted. Readers are referred to the sections entitled 'Non-IFRS Financial Measures' and 'Forward-Looking Statements' at the end of this release.
TORONTO, Nov. 13, 2015/CNW Telbec/ - Power Financial Corporation (TSX: PWF) today reported earnings results for the third quarter and nine months ended September 30, 2015.
THIRD QUARTER RESULTS
Operating earnings attributable to common shareholders (a non-IFRS financial measure) for the quarter ended September 30, 2015were $596 millionor $0.83per share, slightly higher than the record operating earnings of $595 million or $0.83per share in 2014.
Other items in the current quarter, not included in operating earnings, were a contribution of $6 millionconsisting mainly of the Corporation's share of a mark to market gain on the closing of the Lafarge SA (Lafarge) and Holcim Ltd (Holcim) merger.
Net earnings attributable to common shareholders were $602 millionor $0.84per share, compared with $595 millionor $0.83per share in 2014.
NINE-MONTH RESULTS
Operating earnings attributable to common shareholders for the nine months ended September 30, 2015were $1,720 millionor $2.41per share, compared with $1,580 millionor $2.22per share in 2014.
Other items not included in operating earnings contributed $71 million, compared with $50 million in 2014.
Net earnings attributable to common shareholders were $1,791 millionor $2.51per share, compared with $1,630 millionor $2.29per share in 2014.
RESULTS OF GREAT-WEST LIFECO, IGM FINANCIAL AND PARGESA HOLDING
GREAT-WEST LIFECO INC.
For the quarter ended September 30, 2015, Great-West Lifeco Inc. (Lifeco) reported operating and net earnings attributable to common shareholders of $720 million or $0.724per share, compared with $687 millionor $0.687per share in 2014.
For the nine-month period ended September 30, 2015, Lifeco reported operating and net earnings attributable to common shareholders of $2,079 millionor $2.086per share, compared with $1,889 millionor $1.891per share in 2014.
As at September 30, 2015, Power Financial and IGM Financial Inc. (IGM) held 67.4% and 4.0%, respectively, of Lifeco's common shares. Lifeco's contribution to Power Financial's operating earnings was $486 million for the quarter ended September 30, 2015, compared with $462 million in 2014. For the nine months ended September 30, 2015, Lifeco's contribution to Power Financial's operating earnings was $1,401 million, compared with $1,268 millionin 2014.
IGM FINANCIAL INC.
For the quarter ended September 30, 2015, IGM reported operating and net earnings available to common shareholders of $199 millionor $0.81per share, compared with $220 millionor $0.87per share in 2014.
For the nine-month period ended September 30, 2015, IGM reported operating and net earnings available to common shareholders of $598 millionor $2.40per share, compared with operating earnings of $618 millionor $2.44per share, and net earnings of $604 millionor $2.39per share, in 2014.
As at September 30, 2015, Power Financial and The Great-West Life Assurance Company, a subsidiary of Lifeco, held 60.1% and 3.7%, respectively, of IGM's common shares. IGM contributed $121 millionto Power Financial's operating earnings for the quarter ended September 30, 2015, compared with $130 millionin 2014. For the nine months ended September 30, 2015, IGM's contribution to Power Financial's operating earnings was $356 million, compared with $366 millionin 2014.
PARGESA HOLDING SA
For the quarter ended September 30, 2015, Pargesa Holding SA (Pargesa) reported operating earnings of SF100 million, compared with SF146 million in 2014.
For the nine months ended September 30, 2015, Pargesa reported operating earnings of SF307 million, compared with SF294 million in 2014.
Other items in the third quarter were a contribution of SF15 million, and mainly consisted of Pargesa's SF23 million share of a mark to market gain on the closing of the Lafarge and Holcim merger. Other items in the nine-month period of 2015 were a contribution of SF207 million.
Net earnings for the third quarter of 2015 were SF115 million, compared with SF147 million in 2014. For the nine-month period ended September 30, 2015, net earnings were SF514 million, compared with SF525 million in 2014.
As at September 30, 2015, Power Financial held a 50% interest in Parjointco N.V., which in turn held a 55.5% equity interest in Pargesa. Pargesa's contribution to Power Financial's operating earnings was $37 millionfor the three-month period ended September 30, 2015, compared with $48 million in 2014. For the nine-month period ended September 30, 2015, Pargesa's contribution to Power Financial's operating earnings was $111 million, compared with $98 millionin 2014.
DIVIDENDS ON PREFERRED SHARES
The Board of Directors today declared quarterly dividends on the Corporation's preferred shares, as follows:
SERIES - STOCK SYMBOL | RECORD DATE | PAYMENT DATE | AMOUNT |
Series A - PWF.PR.A | January 25, 2016 | February 15, 2016 | At a floating rate equal to one quarter of 70% of the average prime rate of two major Canadian chartered banks (1) |
Series D - PWF.PR.E | January 8, 2016 | January 31, 2016 | 34.375¢ |
Series E - PWF.PR.F | January 8, 2016 | January 31, 2016 | 32.8125¢ |
Series F - PWF.PR.G | January 8, 2016 | January 31, 2016 | 36.875¢ |
Series H - PWF.PR.H | January 8, 2016 | January 31, 2016 | 35.9375¢ |
Series I - PWF.PR.I | January 8, 2016 | January 31, 2016 | 37.50¢ |
Series K - PWF.PR.K | January 8, 2016 | January 31, 2016 | 30.9375¢ |
Series L - PWF.PR.L | January 8, 2016 | January 31, 2016 | 31.875¢ |
Series O - PWF.PR.O | January 8, 2016 | January 31, 2016 | 36.25¢ |
Series P - PWF.PR.P | January 8, 2016 | January 31, 2016 | 27.50¢ |
Series R - PWF.PR.R | January 8, 2016 | January 31, 2016 | 34.375¢ |
Series S - PWF.PR.S | January 8, 2016 | January 31, 2016 | 30¢ |
Series T - PWF.PR.T | January 8, 2016 | January 31, 2016 | 26.25¢ |
(1) | In accordance with the articles of the Corporation |
DIVIDEND ON COMMON SHARES
The Board of Directors also declared a quarterly dividend of 37.25 centsper share on the Corporation's common shares payable February 1, 2016to shareholders of record December 31, 2015.
ABOUT POWER FINANCIAL
Power Financial Corporation is a diversified management and holding company that has interests, directly or indirectly, in companies in the financial services sector in Canada, the United States, Europeand Asia. It also has diversified investments in industrial companies based in Europe. Power Financial Corporation is a member of the Power Corporation Group of Companies. To learn more, visit www.powerfinancial.com.
EARNINGS SUMMARY
(unaudited) (in millions of Canadian dollars, except per share amounts) | Three months ended | Nine months ended | |||
September 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | ||
Operating earnings | |||||
Contribution to operating earnings from: | |||||
Lifeco | 486 | 462 | 1,401 | 1,268 | |
IGM | 121 | 130 | 356 | 366 | |
Pargesa | 37 | 48 | 111 | 98 | |
644 | 640 | 1,868 | 1,732 | ||
Corporate operations | (15) | (13) | (50) | (53) | |
Dividends on perpetual preferred shares | (33) | (32) | (98) | (99) | |
Operating earnings (attributable to common shareholders) | 596 | 595 | 1,720 | 1,580 | |
Other items (non-operating earnings) - see below | 6 | - | 71 | 50 | |
Net earnings (attributable to common shareholders) | 602 | 595 | 1,791 | 1,630 | |
Earnings per share (attributable to common shareholders) | |||||
Operating earnings | 0.83 | 0.83 | 2.41 | 2.22 | |
Non-operating earnings | 0.01 | - | 0.10 | 0.07 | |
Net earnings | 0.84 | 0.83 | 2.51 | 2.29 | |
OTHER ITEMS (NON-OPERATING EARNINGS)
(unaudited) (in millions of Canadian dollars) | Three months ended | Nine months ended | |||
September 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | ||
Share of IGM's other items: | |||||
Restructuring and other charges | (8) | ||||
Share of Pargesa's other items: | |||||
Gain on partial disposal of Total SA | 2 | 9 | 45 | ||
Gain on partial exchange of Suez Environnement | 4 | 17 | |||
Lafarge's impairment charges and restructuring costs | (23) | ||||
LafargeHolcim merger (1) - mark to market gains/reversal of impairment charges | 8 | 88 | |||
Other (charge) income | (2) | (2) | (7) | (4) | |
6 | - | 71 | 50 | ||
(1) | As a result of the merger with Holcim, the investment in Lafarge is no longer accounted for under the equity method. |
Eligible Dividends
For purposes of the Income Tax Act (Canada) and any similar provincial legislation, all of the above dividends on the Corporation's preferred and common shares are eligible dividends.
Non-IFRS Financial Measures and Presentation
In analyzing the financial results of the Corporation and consistent with the presentation in previous periods, net earnings attributable to common shareholders are comprised of:
- operating earnings attributable to common shareholders; and
- other items or non-operating earnings, including 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 or non-operating earnings by a subsidiary or a jointly controlled corporation or associate.
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. Operating 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 part of ongoing activities are excluded from this non-IFRS measure.
Operating earnings attributable to common shareholders and operating 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, financial position and cash flows. In this basis of presentation, Power Financial's interests in Lifeco and IGM are accounted for using the equity method. Presentation on a non-consolidated basis is a non-IFRS presentation. However, it is useful to the reader as it presents the parent's corporate operations as a holding company separate from the results of its operating subsidiaries.
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, 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 North Americaand internationally, interest and foreign exchange rates, global equity and capital markets, management of market liquidity and funding risks, changes in accounting policies and methods used to report financial condition (including uncertainties associated with critical accounting assumptions and estimates), the effect of applying future accounting changes, business competition, operational and reputational risks, technological change, changes in government regulation and legislation, changes in tax laws, unexpected judicial or regulatory proceedings, catastrophic events, the Corporation's and its subsidiaries' ability to complete strategic transactions, integrate acquisitions and implement other growth strategies, and the Corporation's and its subsidiaries' success in anticipating and managing the foregoing factors.
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 Canadaand available at www.sedar.com.
SOURCE Power Financial Corporation
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