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.
MONTREAL, March 23, 2016 /CNW Telbec/ - Power Financial Corporation (TSX: PWF) 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 common shareholders (a non-IFRS financial measure) for the quarter ended December 31, 2015 were $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 the Corporation's share of Groupe Bruxelles Lambert's (GBL) gain on the disposal of a 0.4% equity interest in Total SA (Total), partially offset by impairment and restructuring charges at Imerys, and restructuring and other charges at IGM Financial Inc. (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. Additional details can be found in the table entitled "Other Items" below.
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.
RESULTS OF GREAT-WEST LIFECO, IGM FINANCIAL AND PARGESA HOLDING
GREAT-WEST LIFECO INC.
For the quarter ended December 31, 2015, Great-West Lifeco Inc. (Lifeco) reported operating and net earnings attributable to common shareholders of $683 million or $0.688 per share, compared with $657 million or $0.658 per share in 2014.
For the twelve-month period ended December 31, 2015, Lifeco reported operating and net earnings attributable to common shareholders of $2,762 million or $2.774 per share, compared with $2,546 million or $2.549 per share in 2014.
On February 11, 2016, Lifeco announced an increase of the quarterly dividend on its common shares, from $0.3260 to $0.3460 per share, payable March 31, 2016.
As at December 31, 2015, Power Financial and IGM held 67.4% and 4.0%, respectively, of Lifeco's common shares. Lifeco's contribution to Power Financial's operating earnings was $461 million for the quarter ended December 31, 2015, compared with $442 million in 2014. For the twelve months ended December 31, 2015, Lifeco's contribution to Power Financial's operating earnings was $1,862 million, compared with $1,710 million in 2014.
IGM FINANCIAL INC.
For the quarter ended December 31, 2015, IGM reported operating earnings available to common shareholders of $198 million or $0.81 per share, compared with $208 million or $0.83 per share in 2014. Other items, not included in operating earnings, consisted of an after-tax charge of $24 million related to restructuring and other charges. Other items in the corresponding quarter of 2014 were an after-tax charge of $59 million. For the three months ended December 31, 2015, net earnings available to common shareholders were $174 million or $0.71 per share, compared with $149 million or $0.59 per share in 2014.
For the twelve-month period ended December 31, 2015, IGM reported operating earnings available to common shareholders of $796 million or $3.21 per share, compared with $826 million or $3.27 per share in 2014. Net earnings available to common shareholders, were $772 million or $3.11 per share, compared with $753 million or $2.98 per share in 2014.
As at December 31, 2015, Power Financial and The Great-West Life Assurance Company, a subsidiary of Lifeco, held 60.4% and 3.8%, respectively, of IGM's common shares. IGM contributed $118 million to Power Financial's operating earnings for the quarter ended December 31, 2015, compared with $122 million in 2014. For the twelve months ended December 31, 2015, IGM's contribution to Power Financial's operating earnings was $474 million, compared with $488 million in 2014.
PARGESA HOLDING SA
For the quarter ended December 31, 2015, Pargesa Holding SA (Pargesa) reported operating earnings of SF1 million, compared with SF45 million in 2014.
For the twelve months ended December 31, 2015, Pargesa reported operating earnings of SF308 million, compared with SF339 million in 2014.
Other items in the fourth quarter were a contribution of SF123 million, and mainly consisted of Pargesa's SF190 million share of a gain on a partial disposal of Total by GBL, partially offset by its SF70 million share of impairment and restructuring charges at Imerys. Other items in the twelve-month period ended December 31, 2015 represented a contribution of SF330 million.
Net earnings for the fourth quarter of 2015 were SF124 million, compared with SF112 million in 2014. For the twelve-month period ended December 31, 2015, net earnings were SF638 million, compared with SF637 million in 2014.
At its upcoming annual meeting in May, the board of directors of Pargesa will propose a 2015 dividend of SF2.38 per bearer share, to be paid on May 10, 2016.
As at December 31, 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 $1 million for the three-month period ended December 31, 2015, compared with $14 million in 2014. For the twelve-month period ended December 31, 2015, Pargesa's contribution to Power Financial's operating earnings was $112 million, the same as 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 |
April 25, 2016 |
May 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 |
April 8, 2016 |
April 30, 2016 |
34.375¢ |
| Series E – PWF.PR.F |
April 8, 2016 |
April 30, 2016 |
32.8125¢ |
| Series F – PWF.PR.G |
April 8, 2016 |
April 30, 2016 |
36.875¢ |
| Series H – PWF.PR.H |
April 8, 2016 |
April 30, 2016 |
35.9375¢ |
| Series I – PWF.PR.I |
April 8, 2016 |
April 30, 2016 |
37.50¢ |
| Series K – PWF.PR.K |
April 8, 2016 |
April 30, 2016 |
30.9375¢ |
| Series L – PWF.PR.L |
April 8, 2016 |
April 30, 2016 |
31.875¢ |
| Series O – PWF.PR.O |
April 8, 2016 |
April 30, 2016 |
36.25¢ |
| Series P – PWF.PR.P |
April 8, 2016 |
April 30, 2016 |
14.4125¢ |
| Series Q – PWF.PR.Q |
April 8, 2016 |
April 30, 2016 |
12.9452¢ |
| Series R – PWF.PR.R |
April 8, 2016 |
April 30, 2016 |
34.375¢ |
| Series S – PWF.PR.S |
April 8, 2016 |
April 30, 2016 |
30¢ |
| Series T – PWF.PR.T |
April 8, 2016 |
April 30, 2016 |
26.25¢ |
| [1] In accordance with the articles of the Corporation |
DIVIDEND ON COMMON SHARES
The Board of Directors also declared an increase of the quarterly dividend from 37.25 cents to 39.25 cents per share on the Corporation's common shares payable April 29, 2016 to shareholders of record April 8, 2016.
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 |
Twelve months ended |
||||||
| December 31, 2015 |
December 31, 2014 |
December 31, 2015 |
December 31, 2014 |
|||||
| Operating earnings |
||||||||
| Lifeco |
461 |
442 |
1,862 |
1,710 |
||||
| IGM |
118 |
122 |
474 |
488 |
||||
| Pargesa |
1 |
14 |
112 |
112 |
||||
| 580 |
578 |
2,448 |
2,310 |
|||||
| Corporate operations |
(27) |
(20) |
(77) |
(73) |
||||
| Dividends on perpetual preferred shares |
(32) |
(33) |
(130) |
(132) |
||||
| Operating earnings (attributable to common shareholders) |
521 |
525 |
2,241 |
2,105 |
||||
| Other items (non-operating earnings) – see below |
7 |
(19) |
78 |
31 |
||||
| Net earnings (attributable to common shareholders) |
528 |
506 |
2,319 |
2,136 |
||||
| Earnings per share (attributable to common shareholders) |
||||||||
| Operating earnings |
0.73 |
0.74 |
3.14 |
2.96 |
||||
| Non-operating earnings |
0.01 |
(0.03) |
0.11 |
0.04 |
||||
| Net earnings |
0.74 |
0.71 |
3.25 |
3.00 |
||||
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 IGM's other items: |
||||||||
| Restructuring and other charges |
(15) |
– |
(15) |
(8) |
||||
| Distribution to clients |
– |
(36) |
– |
(36) |
||||
| Share of Pargesa's other items: |
||||||||
| Total – Gain on partial disposal |
48 |
25 |
57 |
70 |
||||
| Suez Environnement Company – Gain on exchange |
– |
– |
4 |
17 |
||||
| LafargeHolcim Ltd – Mark-to-market gains and reversal of impairment charges related to the merger |
– |
– |
88 |
– |
||||
| Lafarge SA – Impairment and restructuring charges |
– |
– |
(23) |
– |
||||
| Imerys – Impairment and restructuring charges |
(26) |
– |
(26) |
– |
||||
| Other (charges) income |
– |
(8) |
(7) |
(12) |
||||
| 7 |
(19) |
78 |
31 |
|||||
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
Mr. Stéphane Lemay, Vice-President, General Counsel and Secretary, 514-286-7400
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