Power Corporation Reports Record 2015 Earnings

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.

MONTRÉAL, March 23, 2016 /CNW Telbec/ - Power Corporation of Canada (TSX: POW) today reported earnings results for the fourth quarter and record earnings for the twelve months ended December 31, 2015.

FOURTH QUARTER RESULTS

Operating earnings attributable to participating shareholders (a non-IFRS financial measure) for the quarter ended December 31, 2015 were $317 million or $0.69 per share, compared with $340 million or $0.74 per share in 2014.

Other items in the period, not included in operating earnings, were a net charge of $8 million, mainly comprised of impairment and/or restructuring charges at Imerys, IGM Financial Inc. (IGM) and other subsidiaries, net of the Corporation's share of Groupe Bruxelles Lambert's (GBL) gain on the partial disposal of its interest in Total SA (Total).

Net earnings attributable to participating shareholders were $309 million or $0.67 per share, compared with $369 million or $0.80 per share in 2014.

2015 RESULTS

Operating earnings attributable to participating shareholders for the twelve months ended December 31, 2015 were $1,573 million or $3.40 per share, compared with $1,238 million or $2.69 per share in 2014.

Other items, not included in operating earnings, resulted in a contribution of $213 million, compared with $37 million in 2014. Additional details can be found in the table entitled "Other Items" below.

Net earnings attributable to participating shareholders were $1,786 million or $3.86 per share, compared with $1,275 million or $2.77 per share in 2014.

RESULTS OF POWER FINANCIAL CORPORATION

FOURTH QUARTER RESULTS

Power Financial reported operating earnings attributable to common shareholders for the quarter ended December 31, 2015 of $521 million or $0.73 per share, compared with $525 million or $0.74 per share in 2014. 

Other items in the quarter, not included in operating earnings, were a contribution of $7 million consisting mainly of Power Financial's share of GBL's gain on the disposal of a 0.4% equity interest in Total, partially offset by impairment and restructuring charges at Imerys, and restructuring and other charges at IGM.

Net earnings attributable to common shareholders were $528 million or $0.74 per share, compared with $506 million or $0.71 per share in 2014.

2015 RESULTS

Operating earnings attributable to common shareholders for the twelve months ended December 31, 2015 were $2,241 million or $3.14 per share, compared with $2,105 million or $2.96 per share in 2014. 

Other items not included in operating earnings were a contribution of $78 million, compared with $31 million in 2014.

Net earnings attributable to common shareholders were $2,319 million or $3.25 per share, compared with $2,136 million or $3.00 per share in 2014.

Earlier today, Power Financial announced an increase of the quarterly dividend on its common shares from 37.25 cents to 39.25 cents per share, payable April 29, 2016.

As at December 31, 2015, Power Corporation held a 65.6% economic interest in Power Financial. Power Financial's contribution to Power Corporation's operating earnings was $341 million for the quarter ended December 31, 2015, compared with $346 million in 2014. For the twelve months ended December 31, 2015, Power Financial contributed $1,470 million to Power Corporation's operating earnings, compared with $1,385 million in 2014.

INCOME FROM INVESTMENTS

FOURTH QUARTER RESULTS

Income from investments was $46 million for the quarter ended December 31, 2015, compared with $57 million in 2014. Income from investments in 2015 is mainly comprised of gains from investment funds of $56 million and gains of $10 million from the Corporation's investment activity in China, partially offset by a negative contribution of $28 million at Sagard Capital.

2015 RESULTS

Income from investments was $355 million for the twelve months ended December 31, 2015, compared with $115 million in 2014. Income from investments in 2015 is mainly comprised of gains of $195 million from the Corporation's investment activity in China and gains from investment funds of $119 million.

DIVIDENDS ON NON-PARTICIPATING PREFERRED SHARES

On February 17, 2016, as previously disclosed, the Board of Directors declared quarterly dividends on the Corporation's preferred shares, as follows:

 

SERIES – STOCK SYMBOL

RECORD DATE

PAYMENT DATE

AMOUNT

1986 Series – POW.PR.F 

March 24, 2016

April 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 A – POW.PR.A

March 24, 2016

April 15, 2016

35¢

Series B – POW.PR.B

March 24, 2016

April 15, 2016

33.4375¢

Series C – POW.PR.C

March 24, 2016

April 15, 2016

36.25¢

Series D – POW.PR.D

March 24, 2016

April 15, 2016

31.25¢

Series G – POW.PR.G

March 24, 2016

April 15, 2016

35¢

[1] In accordance with the articles of the Corporation

 

DIVIDENDS ON PARTICIPATING SHARES

On February 17, 2016, as previously disclosed, the Board of Directors also declared a quarterly dividend of 31.125 cents per share on the Participating Preferred Shares and the Subordinate Voting Shares of the Corporation, payable March 31, 2016 to shareholders of record March 10, 2016.

ABOUT POWER CORPORATION

Power Corporation of Canada is a diversified international management and holding company with interests in companies in the financial services, communications and other business sectors in North America, Europe and Asia. To learn more, visit www.powercorporation.com.

EARNINGS SUMMARY




(unaudited)

(in millions of Canadian dollars, except per share amounts)

Three months ended

Twelve months ended


December 31,

2015

December 31,

2014

December 31,

2015

December 31,

2014

Operating earnings






Power Financial

341

346

1,470

1,385


Other subsidiaries [1]

(22)

(14)

(66)

(79)


319

332

1,404

1,306

Corporate operations






Income from investments [2]

46

57

355

115


Operating and other expenses

(35)

(36)

(134)

(131)

Dividends on non-participating shares

(13)

(13)

(52)

(52)

Operating earnings (attributable to participating shareholders)

317

340

1,573

1,238






Other items (non-operating earnings) – see below

(8)

29

213

37

Net earnings (attributable to participating shareholders)

309

369

1,786

1,275






Earnings per share (attributable to participating shareholders) 






Operating earnings

0.69

0.74

3.40

2.69


Non-operating earnings

(0.02)

0.06

0.46

0.08


Net earnings

0.67

0.80

3.86

2.77



[1]

Comprised of: Square Victoria Communications Group Inc., Power Energy Corporation, and controlled portfolio investments (Alvest and Les Délices des 7 Vallées (held through Sagard Europe) and IntegraMed America, Inc. (held through Sagard Capital)).

[2]

Includes income from Sagard investment funds (excluding income from controlled portfolio investments) and income from other investments.

 

OTHER ITEMS (NON-OPERATING EARNINGS)


(unaudited)

(in millions of Canadian dollars)

Three months ended

Twelve months ended


December 31,

2015

December 31,

2014

December 31,

2015

December 31,

2014

Share of Power Financial's other items:






IGM







Restructuring and other charges

(10)

(10)

(5)



Distribution to clients

(24)

(24)


Pargesa Holding SA







Total – Gain on partial disposal

32

16

38

45



Suez Environnement Company – Gain on exchange

2

11



LafargeHolcim Ltd – Mark-to-market gains and reversal of impairment charges related to the merger

58



Lafarge SA – Impairment and restructuring charges

(15)



Imerys – Impairment and restructuring charges

(17)

(17)



Other (charges) income

(5)

(5)

(7)


5

(13)

51

20

Other subsidiaries

(13)

42

(21)

17

CITIC – partial recovery of prior period impairment charges

183


(8)

29

213

37

 

INCOME FROM INVESTMENTS




(unaudited)

(in millions of Canadian dollars)

Three months ended

Twelve months ended


December 31,

2015

December 31,

2014

December 31,

2015

December 31,

2014

Sagard Investment Funds






Sagard Europe [1]

38

31

29


Sagard Capital [2]

(28)

(1)

(29)

12


Sagard China

4

143

7

Other Investments






Investment and hedge funds

56

14

119

43


China AMC

6

6

4


CITIC [3]

6


Other[4]

8

6

85

14


46

57

355

115



[1]

Excludes the Corporation's share of the results of Alvest and Les Délices des 7 Vallées, presented in operating earnings.

[2]

Excludes the Corporation's share of the results of IntegraMed America, Inc., presented in operating earnings.

[3]

The investment in CITIC was disposed of in April 2015.

[4]

Includes $46 million on the disposal of an investment in China in the twelve month period ended December 31, 2015.

 

INVESTMENTS



(unaudited)

(in millions of Canadian dollars)

December 31, 2015

December 31, 2014


Cost

Unrealized
gain (loss)

Fair value

Cost

Unrealized
gain (loss)

Fair value

Sagard Investment Funds








Sagard Europe [1]

154

40

194

127

26

153


Sagard Capital [2]

268

202

470

264

182

446


Sagard China [3]

462

36

498

195

122

317

Other Investments








China AMC

282

28

310

282

28

310


CITIC

180

131

311


Investment and hedge funds and other

281

213

494

343

205

548

Total [4]

1,447

519

1,966

1,391

694

2,085



[1]

Including Sagard Europe's investment in Alvest and Les Délices des 7 Vallées at fair value, the fair value of Sagard Europe's portfolio at December 31, 2015 was $257 million ($153 million at December 31, 2014).

[2]

Including cash and Sagard Capital's investment in IntegraMed America, Inc. at fair value, the fair value of Sagard Capital's portfolio at December 31, 2015 was $951 million ($626 million at December 31, 2014).

[3]

Including cash, the fair value of Sagard China's portfolio at December 31, 2015 was $666 million ($403 million at December 31, 2014).

[4]

Total fair value includes $972 million of investments at December 31, 2015 ($1,097 million at December 31, 2014) valued using quoted prices in active markets.

 

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 shares (including the Participating Preferred Shares) and Subordinate Voting 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 participating shareholders are comprised of:

  • operating earnings attributable to participating shareholders; and
  • other items or non-operating earnings, 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 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 Corporation, 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 considered to be ongoing operating activities are excluded from this non-IFRS measure.

Operating earnings attributable to participating 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 Corporation's interests in Power Financial and other subsidiaries 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 holding company's (parent) results separately 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 America and 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 Canada and available at www.sedar.com.

 

SOURCE Power Corporation of Canada

For further information: Mr. Stéphane Lemay, Vice-President, General Counsel and Secretary, 514-286-7400

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