Power Corporation Reports Record Operating Earnings - 2015 Third Quarter and Nine-Month Financial Results and Dividends

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/ - Power Corporation of Canada (TSX: POW) today reported earnings results for the third quarter and nine months ended September 30, 2015.

THIRD QUARTER RESULTS

Operating earnings attributable to participating shareholders (a non-IFRS financial measure) for the quarter ended September 30, 2015 were $484 million or $1.04 per share, compared with $350 million or $0.76 per share in 2014.

Other items in the current period, not included in operating earnings, were a contribution of $24 million, mainly comprised of net gains of $20 million on Square Victoria Communications Group Inc.'s (SVCG) sale of non-core businesses, net of restructuring charges, and a contribution of $5 million representing 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 participating shareholders were $508 million or $1.09 per share, compared with $350 million or $0.76 per share in 2014.

NINE-MONTH RESULTS

Operating earnings attributable to participating shareholders for the nine months ended September 30, 2015 were $1,256 million or $2.71 per share, compared with $898 million or $1.95 per share in 2014.

Other items, not included in operating earnings, resulted in a contribution of $221 million, compared with $8 million in 2014.

Net earnings attributable to participating shareholders were $1,477 million or $3.19 per share, compared with $906 million or $1.97 per share in 2014.

RESULTS OF POWER FINANCIAL CORPORATION

THIRD QUARTER RESULTS

Power Financial reported operating earnings attributable to common shareholders for the quarter ended September 30, 2015 of $596 million or $0.83 per share, compared with $595 million or $0.83 per share in 2014. 

Other items in the current quarter, not included in operating earnings, were a contribution of $6 million consisting mainly of Power Financial's share of a mark to market gain on the closing of the Lafarge and Holcim merger.

Net earnings attributable to common shareholders were $602 million or $0.84 per share, compared with $595 million or $0.83 per share in 2014.

NINE-MONTH RESULTS

Operating earnings attributable to common shareholders for the nine months ended September 30, 2015 were $1,720 million or $2.41 per share, compared with $1,580 million or $2.22 per 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 million or $2.51 per share, compared with $1,630 million or $2.29 per share in 2014.

As at September 30, 2015, Power Corporation held a 65.6% economic interest in Power Financial. Power Financial's contribution to Power Corporation's operating earnings was $391 million for the quarter ended September 30, 2015, and in 2014. For the nine months ended September 30, 2015, Power Financial contributed $1,129 million to Power Corporation's operating earnings, compared with $1,039 million in 2014.

RESULTS FROM OTHER SUBSIDIARIES AND INCOME FROM INVESTMENTS

THIRD QUARTER RESULTS

The contribution to earnings from income from investments was $144 million for the quarter ended September 30, 2015, compared with $29 million in 2014. Income from investments is mainly comprised of gains from Sagard China ($37 million), Sagard Europe ($35 million), and other investment and hedge funds ($55 million). The contribution from other subsidiaries in the current quarter includes a gain of $17 million on the sale of a business by a controlled portfolio investment.

NINE-MONTH RESULTS

The contribution to earnings from income from investments was $309 million for the nine months ended September 30, 2015, compared with $58 million in 2014. Income from investments includes gains of $185 million from the Corporation's investment activity in China.

DIVIDENDS ON NON-PARTICIPATING 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

1986 Series – POW.PR.F 

December 24, 2015

January 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

December 24, 2015

January 15, 2016

35¢

Series B – POW.PR.B

December 24, 2015

January 15, 2016

33.4375¢

Series C – POW.PR.C

December 24, 2015

January 15, 2016

36.25¢

Series D – POW.PR.D

December 24, 2015

January 15, 2016

31.25¢

Series G – POW.PR.G

December 24, 2015

January 15, 2016

35¢

(1)     In accordance with the articles of the Corporation

 

DIVIDENDS ON PARTICIPATING SHARES

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 December 31, 2015 to shareholders of record December 10, 2015.

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

Nine months ended


September 30,

2015

September 30,

2014

September 30,

2015

September 30,

2014

Operating earnings





Contribution to operating earnings from:






Power Financial

391

391

1,129

1,039


Other subsidiaries (1)

(5)

(24)

(44)

(65)


386

367

1,085

974

Corporate operations






Income from investments (2)

144

29

309

58


Operating and other expenses

(33)

(33)

(99)

(95)

Dividends on non-participating shares

(13)

(13)

(39)

(39)

Operating earnings (attributable to participating shareholders)

484

350

1,256

898

Other items (non-operating earnings) – see below

24

221

8

Net earnings (attributable to participating shareholders)

508

350

1,477

906

Earnings per share (attributable to participating shareholders) 






Operating earnings

1.04

0.76

2.71

1.95


Non-operating earnings

0.05

0.48

0.02


Net earnings

1.09

0.76

3.19

1.97



(1)

Comprising 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

Nine months ended


September 30,

2015

September 30,

2014

September 30,

2015

September 30,

2014

Share of Power Financial's other items:






IGM Financial Inc.







Restructuring and other charges




(5)


Pargesa Holding SA







Gain on partial disposal of Total SA


1

6

29



Gain on partial exchange of Suez Environnement



2

11



Lafarge's impairment charges and restructuring costs



(15)




LafargeHolcim merger (1) – mark to market gains/reversal of impairment charges

5


58




Other (charge) income

(1)

(1)

(5)

(2)


4

46

33

Other subsidiaries

20


(8)

(25)

Disposal of investment in CITIC Limited



183



24

221

8



(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 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, 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 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 part of ongoing 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 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 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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www.powercorporation.com

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