Power Financial Corporation Reports 2015 Second Quarter and Six-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, Aug. 7, 2015 /CNW Telbec/ - Power Financial Corporation (TSX: PWF) today reported earnings results for the second quarter and six months ended June 30, 2015.

SECOND QUARTER RESULTS
Operating earnings attributable to common shareholders (a non-IFRS financial measure) for the quarter ended June 30, 2015 were $559 million or $0.79 per share, compared with $545 million or $0.77 per share in 2014.  

Other items, not included in operating earnings, were a contribution of $57 million mainly comprised of the Corporation's share of Groupe Bruxelles Lambert's (GBL) partial reversal of impairment charges on Lafarge SA (Lafarge), partially offset by restructuring costs and impairment charges recorded by Lafarge related to the merger with Holcim. In 2014, other items represented a contribution of $23 million. Additional details on other items can be found in the table entitled "Other Items" below.

Net earnings attributable to common shareholders were $616 million or $0.87 per share, compared with $568 million or $0.80 per share in 2014.

SIX-MONTH RESULTS
Operating earnings attributable to common shareholders for the six months ended June 30, 2015 were $1,124 million or $1.58 per share, compared with $985 million or $1.39 per share in 2014. 

Other items, not included in operating earnings, resulted in a contribution of $65 million, compared with a contribution of $50 million in 2014.

Net earnings attributable to common shareholders were $1,189 million or $1.67 per share, compared with $1,035 million or $1.46 per share in 2014.

RESULTS OF GREAT-WEST LIFECO, IGM FINANCIAL AND PARGESA HOLDING

GREAT-WEST LIFECO INC.
For the quarter ended June 30, 2015, Great-West Lifeco Inc. (Lifeco) reported operating and net earnings attributable to common shareholders of $659 million or $0.661 per share, compared with $615 million or $0.616 per share in 2014.

For the six-month period ended June 30, 2015, Lifeco reported operating and net earnings attributable to common shareholders of $1,359 million or $1.363 per share, compared with $1,202 million or $1.203 per share in 2014.

As at June 30, 2015, Power Financial and IGM Financial Inc. (IGM) held 67.2% and 4.0%, respectively, of Lifeco's common shares. Lifeco's contribution to Power Financial's operating earnings was $442 million for the quarter ended June 30, 2015, compared with $413 million in 2014. For the six months ended June 30, 2015, Lifeco's contribution to Power Financial's operating earnings was $915 million, compared with $806 million in 2014.

IGM FINANCIAL INC.
For the quarter ended June 30, 2015, IGM reported operating and net earnings available to common shareholders of $199 million or $0.80 per share, compared with operating earnings of $204 million or $0.81 per share, and net earnings of $190 million or $0.75 per share, in 2014.

For the six-month period ended June 30, 2015, IGM reported operating and net earnings available to common shareholders of $399 million or $1.59 per share, compared with operating earnings of $398 million or $1.57 per share, and net earnings of $385 million or $1.52 per share, in 2014.

As at June 30, 2015, Power Financial and The Great-West Life Assurance Company, a subsidiary of Lifeco, held 59.8% and 3.7%, respectively, of IGM's common shares. IGM contributed $116 million to Power Financial's operating earnings for the quarter ended June 30, 2015, compared with $120 million in 2014. For the six months ended June 30, 2015, IGM's contribution to Power Financial's operating earnings was $235 million, compared with $236 million in 2014.

PARGESA HOLDING SA
For the quarter ended June 30, 2015, Pargesa Holding SA (Pargesa) reported operating earnings of SF153 million, compared with SF198 million in 2014.

For the six months ended June 30, 2015, Pargesa reported operating earnings of SF207 million, compared with SF148 million in 2014.

Other items in the second quarter were a contribution of SF159 million, and included Pargesa's SF221 million share of the reversal of impairment charges previously recorded by GBL on its holding in Lafarge. In the corresponding period in 2014, other items were a contribution of SF132 million.

Other items in the six-month period of 2015 were a contribution of SF192 million. In addition to the items above, other items included Pargesa's share of gains on the partial disposal of its interest in Total SA (Total) and on the partial exchange of Suez Environnement Company (Suez Environnement) bonds. In the corresponding period in 2014, other items were a contribution of SF230 million.

Net earnings for the second quarter of 2015 were SF312 million, compared with SF330 million in 2014. For the six-month period ended June 30, 2015, net earnings were SF399 million, compared with SF378 million in 2014.

Power Financial holds a 50% interest in Parjointco N.V., which in turn held a 55.5% equity interest in Pargesa at June 30, 2015. Pargesa's contribution to Power Financial's operating earnings was $55 million for the three-month period ended June 30, 2015, compared with $67 million in 2014. For the six-month period ended June 30, 2015, Pargesa's contribution to Power Financial's operating earnings was $74 million, compared with $50 million in 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

October 23, 2015

November 15, 2015

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

October 9, 2015

October 31, 2015

34.375¢

Series E – PWF.PR.F

October 9, 2015

October 31, 2015

32.8125¢

Series F – PWF.PR.G

October 9, 2015

October 31, 2015

36.875¢

Series H – PWF.PR.H

October 9, 2015

October 31, 2015

35.9375¢

Series I – PWF.PR.I

October 9, 2015

October 31, 2015

37.50¢

Series K – PWF.PR.K

October 9, 2015

October 31, 2015

30.9375¢

Series L – PWF.PR.L

October 9, 2015

October 31, 2015

31.875¢

Series O – PWF.PR.O

October 9, 2015

October 31, 2015

36.25¢

Series P – PWF.PR.P

October 9, 2015

October 31, 2015

27.50¢

Series R – PWF.PR.R

October 9, 2015

October 31, 2015

34.375¢

Series S – PWF.PR.S

October 9, 2015

October 31, 2015

30¢

Series T – PWF.PR.T

October 9, 2015

October 31, 2015

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 cents per share on the Corporation's common shares payable October 30, 2015 to shareholders of record September 30, 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, Europe and 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


Six months ended


June 30,

2015


June 30,

2014


June 30,

2015


June 30,

2014

Operating earnings








Contribution to operating earnings from:









Lifeco

442


413


915


806


IGM

116


120


235


236


Pargesa

55


67


74


50


613


600


1,224


1,092

Corporate operations

(22)


(22)


(35)


(40)

Dividends on perpetual preferred shares

(32)


(33)


(65)


(67)

Operating earnings (attributable to common shareholders)

559


545


1,124


985

Other items (non-operating earnings) – see below

57


23


65


50

Net earnings (attributable to common shareholders)

616


568


1,189


1,035









Earnings per share (attributable to common shareholders)









Operating earnings

0.79


0.77


1.58


1.39


Non-operating earnings

0.08


0.03


0.09


0.07


Net earnings

0.87


0.80


1.67


1.46



OTHER ITEMS (NON-OPERATING EARNINGS)


(unaudited)

(in millions of Canadian dollars)

Three months ended


Six months ended


June 30,

2015


June 30,

2014


June 30,

2015


June 30,

2014

Share of IGM's other items:









Restructuring and other charges



(8)




(8)

Share of Pargesa's other items:









Gain on partial disposal of Total



17


9


43


Gain on partial exchange of Suez Environnement

2


17


4


17


Partial reversal of impairment charges on Lafarge

80




80




Share of Lafarge's impairment charges and restructuring costs

(23)




(23)




Other (charge) income

(2)


(3)


(5)


(2)


57


23


65


50

 

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 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 Financial Corporation

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

RELATED LINKS
www.powerfinancial.com

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890