Power Financial Reports First Quarter 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 Presentation" and "Forward-Looking Statements" at the end of this release.  

MONTRÉAL, May 12, 2016 /CNW Telbec/ - Power Financial Corporation (TSX: PWF) today reported earnings results for the three months ended March 31, 2016.

FIRST QUARTER RESULTS
Operating earnings attributable to common shareholders (a non-IFRS financial measure) for the quarter ended March 31, 2016 were $476 million or $0.67 per share, compared with $565 million or $0.79 per share in 2015.  

Non-operating items, not included in operating earnings, were a net charge of $217 million mainly comprised of the Corporation's $308 million share of Groupe Bruxelles Lambert's (GBL) non-cash impairment charge resulting from the mark to market of its LafargeHolcim Ltd (LafargeHolcim) investment, and a gain of $101 million on the partial disposal of GBL's interest in Total SA (Total). 

Net earnings attributable to common shareholders were $259 million or $0.36 per share, compared with $573 million or $0.80 per share in 2015.

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

GREAT-WEST LIFECO INC.
For the quarter ended March 31, 2016, Great-West Lifeco Inc. (Lifeco) reported operating and net earnings attributable to common shareholders of $620 million or $0.625 per share, compared with $700 million or $0.702 per share in 2015.

As at March 31, 2016, 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 $419 million for the quarter ended March 31, 2016, compared with $473 million in 2015.

IGM FINANCIAL INC.
For the quarter ended March 31, 2016, IGM reported operating and net earnings available to common shareholders of $167 million or $0.69 per share, compared with $200 million or $0.80 per share in 2015.

As at March 31, 2016, Power Financial and The Great-West Life Assurance Company, a subsidiary of Lifeco, held 61.2% and 3.8%, respectively, of IGM's common shares. IGM contributed $100 million to Power Financial's operating earnings for the quarter ended March 31, 2016, compared with $119 million in 2015.

PARGESA HOLDING SA
For the quarter ended March 31, 2016, Pargesa Holding SA (Pargesa) reported operating earnings of SF77 million, compared with SF54 million in 2015.

Non-operating items in the quarter, not included in operating earnings, were a net charge of SF448 million, representing Pargesa's share of GBL's non-operating items as discussed above.

Pargesa reported a net loss of SF371 million for the first quarter of 2016, compared with net earnings of SF87 million in 2015.

As at March 31, 2016, 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 $29 million for the quarter ended March 31, 2016, compared with $19 million in 2015.

DIVIDEND ON COMMON SHARES
The Board of Directors today declared a quarterly dividend of 39.25 cents per share on the Corporation's common shares payable July 29, 2016 to shareholders of record June 30, 2016.

DIVIDENDS ON PREFERRED SHARES
The Board of Directors also declared quarterly dividends on the Corporation's preferred shares, as follows:

 

SERIES – STOCK SYMBOL

RECORD DATE

PAYMENT DATE

AMOUNT

Series A – PWF.PR.A

July 25, 2016

August 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

July 11, 2016

July 31, 2016

34.375¢

Series E – PWF.PR.F

July 11, 2016

July 31, 2016

32.8125¢

Series F – PWF.PR.G

July 11, 2016

July 31, 2016

36.875¢

Series H – PWF.PR.H

July 11, 2016

July 31, 2016

35.9375¢

Series I – PWF.PR.I

July 11, 2016

July 31, 2016

37.50¢

Series K – PWF.PR.K

July 11, 2016

July 31, 2016

30.9375¢

Series L – PWF.PR.L

July 11, 2016

July 31, 2016

31.875¢

Series O – PWF.PR.O

July 11, 2016

July 31, 2016

36.25¢

Series P – PWF.PR.P

July 11, 2016

July 31, 2016

14.4125¢

Series Q – PWF.PR.Q

July 11, 2016

July 31, 2016

12.9808¢

Series R – PWF.PR.R

July 11, 2016

July 31, 2016

34.375¢

Series S – PWF.PR.S

July 11, 2016

July 31, 2016

30¢

Series T – PWF.PR.T

July 11, 2016

July 31, 2016

26.25¢

[1] In accordance with the articles of the Corporation

 

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 and Europe. 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


March 31,

2016


March 31,

2015

Operating earnings





Lifeco

419


473


IGM

100


119


Pargesa

29


19


548


611

Corporate operations [1]

(41)


(13)

Dividends on perpetual preferred shares

(31)


(33)

Operating earnings (attributable to common shareholders)

476


565

Other items (non-operating earnings) – see below

(217)


8

Net earnings (attributable to common shareholders)

259


573

Earnings per share (attributable to common shareholders)





Operating earnings

0.67


0.79


Non-operating earnings

(0.31)


0.01


Net earnings

0.36


0.80

[1] Includes foreign exchange gains and losses and gains or losses on other investments.





OTHER ITEMS (NON-OPERATING EARNINGS)




(unaudited)
(in millions of Canadian dollars)

Three months ended


March 31,

2016


March 31,

2015

Share of Pargesa's other items:





Total – Gain on partial disposal

101


9


Suez Environnement Company – Gain on exchange


2


LafargeHolcim – Impairment charge

(308)



Engie – Impairment charge

(9)



Other (charge) income

(1)


(3)


(217)


8

 

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, 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 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 considered to be ongoing operating 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 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 Financial Corporation

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

RELATED LINKS
www.powerfinancial.com

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