Readers are referred to the sections "Non-IFRS Financial
Measures and Presentation" and "Forward-Looking Statements" at the
end of this release.
MONTREAL, Nov. 7, 2019 /CNW Telbec/ - Power
Corporation of Canada (TSX: POW)
today reported earnings results for the three and nine months ended
September 30, 2019.
Power Corporation
Consolidated results for the period ended September 30
Highlights
- Sales at Great-West Lifeco Inc. (Lifeco) for the third quarter
of 2019 were $41.9 billion, up 22%
from the third quarter of 2018, primarily driven by a 29% increase
in the U.S., reflecting higher Empower Retirement sales and a 22%
increase in Canada, driven by
higher Group Customer sales in both Insurance and Wealth.
- Consolidated assets under administration at Lifeco at
September 30, 2019 were approximately
$1.6 trillion, a 14% increase from
December 31, 2018.
- IGM Financial Inc. (IGM) reported record high quarter-end
assets under management at September 30,
2019 of $162.5 billion, an
increase of 1.8% from the prior year driven by favourable
investment returns.
- Pargesa Holding SA's (Pargesa) net asset value has risen by 15%
since the beginning of the year, to reach SF10.3 billion at
September 30, 2019.
Third Quarter
Net earnings attributable to participating shareholders were
$0.84 per share or $359 million, compared with $0.40 per share or $186
million in 2018.
Adjusted net earnings attributable to participating shareholders
(a non-IFRS financial measure) were $0.78 per share or $332 million, compared
with $0.61 per share or $283 million in 2018.
Contributions to Power Corporation's net earnings per share and
adjusted net earnings per share were:
|
|
2019
|
2018
|
|
(in dollars per Power
Corporation share)
|
Net
Earnings [1]
|
Adjusted Net
Earnings [1]
|
Net
Earnings
|
Adjusted
Net
Earnings
|
|
· Power
Financial Corporation (Power
Financial) [2]
|
0.87
|
0.88
|
0.74
|
0.82
|
|
· Sagard
Investment Funds, China AMC and Other investments
|
0.04
|
0.04
|
(0.07)
|
(0.07)
|
|
·
Corporate and Other Subsidiaries
|
(0.07)
|
(0.14)
|
(0.27)
|
(0.14)
|
|
0.84
|
0.78
|
0.40
|
0.61
|
|
|
|
[1]
|
The Corporation
completed a substantial issuer bid in the second quarter of
2019 and repurchased 9.8% of its subordinated voting
shares.
|
|
[2]
|
As a result of the
Corporation's participation in Power Financial's substantial issuer
bid, in the second quarter of 2019, the number of shares held by
the Corporation decreased by 9.1%.
|
Other items, not included in adjusted net earnings, were income
of $0.06 per share or $27 million consisting mainly of a favourable
change to the Corporation's income tax provision estimates of
$31 million, partially offset
by a charge of $4 million related to the Corporation's
share of other charges at Pargesa related to Parques Reunidos
Servicios Centrales, S.A. (Parques), an equity investment. Other
items in 2018 were a charge of $0.21 per share or
$97 million.
Nine Months
Net earnings attributable to participating shareholders were
$2.11 per share or $929 million, compared with $2.28 per share or $1,058
million in 2018.
Adjusted net earnings attributable to participating shareholders
were $2.26 per share or
$996 million, compared with $2.49 per share or $1,155
million in 2018.
Contributions to Power Corporation's net earnings per share and
adjusted net earnings per share were:
|
|
2019
|
2018
|
|
(in dollars per Power
Corporation share)
|
Net
Earnings [1]
|
Adjusted Net
Earnings [1]
|
Net
Earnings
|
Adjusted
Net
Earnings
|
|
· Power
Financial [2]
|
2.28
|
2.50
|
2.49
|
2.57
|
|
· Sagard
Investment Funds, China AMC and Other investments
|
0.22
|
0.22
|
0.39
|
0.39
|
|
·
Corporate and Other Subsidiaries
|
(0.39)
|
(0.46)
|
(0.60)
|
(0.47)
|
|
2.11
|
2.26
|
2.28
|
2.49
|
|
|
|
[1]
|
See note 1
above.
|
|
[2]
|
See note 2
above.
|
Other items, not included in adjusted net earnings, were a
charge of $0.15 per share or
$67 million, compared with a charge
of $0.21 per share or $97 million in 2018.
Power Financial Corporation
Results for the period ended September
30
Third Quarter
Net earnings attributable to common shareholders were $0.88 per share or $584
million, compared with $0.74
per share or $523 million in 2018.
Adjusted net earnings attributable to common shareholders
were $0.89 per share or $590 million, compared with $0.81 per share or $578 million in 2018.
Contributions to Power Financial's net earnings per share
and adjusted net earnings per share were:
|
|
2019
|
2018
|
|
(in dollars per Power
Financial share)
|
Net
Earnings [1]
|
Adjusted Net
Earnings [1]
|
Net
Earnings
|
Adjusted
Net
Earnings
|
|
· Lifeco
[2]
|
0.74
|
0.74
|
0.66
|
0.71
|
|
·
IGM
|
0.19
|
0.19
|
0.16
|
0.18
|
|
·
Pargesa
|
0.04
|
0.05
|
0.02
|
0.02
|
|
· Power
Financial Corporate and Other
|
(0.09)
|
(0.09)
|
(0.10)
|
(0.10)
|
|
0.88
|
0.89
|
0.74
|
0.81
|
|
|
|
[1]
|
Power Financial
completed a substantial issuer bid in the second quarter of 2019
and repurchased 7.0% of its common shares.
|
|
[2]
|
As a result of its
participation in Lifeco's substantial issuer bid, in the second
quarter of 2019, the number of shares held by Power Financial
decreased by 7.4%.
|
Other items, not included in adjusted net earnings, were a
charge of $0.01 per share or
$6 million consisting of Power
Financial's share of other charges at Parques. Other items in 2018
were a charge of $0.07 per share or
$55 million.
Nine Months
Net earnings attributable to common shareholders were $2.29 per share or $1,563
million, compared with $2.48
per share or $1,767 million in
2018.
Adjusted net earnings attributable to common shareholders
were $2.51 per share or $1,715 million, compared with $2.55 per share or $1,822 million in 2018.
Contributions to Power Financial's net earnings per share
and adjusted net earnings per share were:
|
2019
|
2018
|
|
(in dollars per Power
Financial share)
|
Net
Earnings [1]
|
Adjusted Net
Earnings [1]
|
Net
Earnings
|
Adjusted
Net
Earnings
|
|
· Lifeco
[2]
|
1.82
|
2.01
|
2.14
|
2.19
|
|
·
IGM
|
0.50
|
0.51
|
0.48
|
0.50
|
|
·
Pargesa
|
0.23
|
0.25
|
0.13
|
0.13
|
|
· Power
Financial Corporate and Other
|
(0.26)
|
(0.26)
|
(0.27)
|
(0.27)
|
|
2.29
|
2.51
|
2.48
|
2.55
|
|
|
|
[1]
|
See note 1
above.
|
|
[2]
|
See note 2
above.
|
Other items, not included in adjusted net earnings, were a
charge of $0.22 per share or
$152 million consisting of Power
Financial's share of Lifeco's net charge on the sale of the U.S.
individual life insurance and annuity business, its share of
Imerys' restructuring and other charges, and its share of charges
at Parques discussed above. Other items in 2018 were a charge of
$0.07 per share or $55 million.
Sagard Investment Funds, China AMC and Other Investments
For the period ended September 30
(For additional information, refer to the table further in this
release.)
Third Quarter
Income from investments was $16
million, compared with a loss of $28
million in 2018.
Nine Months
Income from investments was $96
million, compared with $184
million in 2018. Income from investments in the period
mainly comprised realized gains in Sagard China and a gain related
to a private investment fund.
Dividends on Power Corporation Participating Shares
The Board of Directors today declared a quarterly dividend of
40.50 cents per share on the
Participating Preferred Shares and the Subordinate Voting Shares of
the Corporation, payable December 31,
2019 to shareholders of record December 10, 2019.
Dividends on Power Corporation Non-Participating Preferred
Shares
The Board of Directors also declared quarterly dividends on the
Corporation's preferred shares, payable January 15, 2020 to
shareholders of record December 24,
2019:
|
|
|
|
|
|
|
|
Series
|
Stock
Symbol
|
Amount
|
|
Series
|
Stock
Symbol
|
Amount
|
|
1986 Series
|
POW.PR.F
|
Floating rate
[1]
|
|
Series C
|
POW.PR.C
|
36.25¢
|
|
Series A
|
POW.PR.A
|
35¢
|
|
Series D
|
POW.PR.D
|
31.25¢
|
|
Series B
|
POW.PR.B
|
33.4375¢
|
|
Series G
|
POW.PR.G
|
35¢
|
|
|
|
[1]
|
Equal to one quarter
of 70% of the average prime rate of two major Canadian chartered
banks for the period September 1 to November 30, 2019.
|
About Power Corporation
Power Corporation of Canada is
a diversified international management and holding company with
interests in companies in the financial services, asset management,
sustainable and renewable energy, and other business sectors in
North America, Europe and Asia. To learn more, visit
www.PowerCorporation.com.
At September 30, 2019, Power
Corporation held the following economic interests:
- 64.1% – Power Financial (TSX: PWF) www.powerfinancial.com
- 100% – Sagard SAS (Europe)
www.sagard.com
- 100% – Sagard Holdings www.sagardholdings.com
- 100% – Sagard China www.sagardchina.com
- 100% – Power Energy Corporation
www.powerenergycorporation.com
- 27.8% – China Asset Management Co., Ltd. [1]
www.chinaamc.com
|
[1]
|
IGM Financial Inc.
(IGM) and the Corporation each hold a 13.9% interest in China
AMC.
|
|
Earnings
Summary
|
|
|
|
|
Earnings per
Share
|
|
|
|
|
(unaudited)
|
Three months
ended
|
Nine months
ended
|
|
(in dollars per
share)
|
September
30,
|
September
30,
|
|
2019
|
2018
|
2019
|
2018
|
|
Adjusted net
earnings per share - basic
|
|
|
|
|
|
Power Financial
[1]
|
0.88
|
0.82
|
2.50
|
2.57
|
|
Other subsidiaries
[2]
|
(0.03)
|
(0.03)
|
(0.12)
|
(0.15)
|
|
0.85
|
0.79
|
2.38
|
2.42
|
|
Income (loss) –
Sagard Investment Funds, China AMC and Other
investments
|
0.04
|
(0.07)
|
0.22
|
0.39
|
|
Operating and other
expenses, and dividends on
non-participating shares
|
(0.11)
|
(0.11)
|
(0.34)
|
(0.32)
|
|
Adjusted net
earnings per share [3]
|
0.78
|
0.61
|
2.26
|
2.49
|
|
Other items – see
below
|
0.06
|
(0.21)
|
(0.15)
|
(0.21)
|
|
Net earnings per
share [3]
|
0.84
|
0.40
|
2.11
|
2.28
|
|
Earnings
|
|
|
|
|
(unaudited)
|
Three months
ended
|
Nine months
ended
|
|
(in millions of
Canadian dollars)
|
September
30,
|
September
30,
|
|
2019
|
2018
|
2019
|
2018
|
|
Adjusted net
earnings
|
|
|
|
|
|
Power Financial
[1]
|
377
|
377
|
1,104
|
1,193
|
|
Other subsidiaries
[2]
|
(13)
|
(17)
|
(54)
|
(72)
|
|
364
|
360
|
1,050
|
1,121
|
|
Corporate
operations
|
|
|
|
|
|
Income (loss) –
Sagard Investment Funds, China AMC and Other
investments
|
16
|
(28)
|
96
|
184
|
|
Operating and other
expenses
|
(35)
|
(36)
|
(111)
|
(111)
|
|
Dividends on
non-participating shares
|
(13)
|
(13)
|
(39)
|
(39)
|
|
Adjusted net
earnings [3]
|
332
|
283
|
996
|
1,155
|
|
Other items – see
below
|
27
|
(97)
|
(67)
|
(97)
|
|
Net
earnings [3]
|
359
|
186
|
929
|
1,058
|
|
|
|
[1]
|
The contributions
from IGM and Pargesa reflect adjustments in accordance with IAS
39.
|
|
[2]
|
Comprised of
operating results of: Power Energy Corporation, Square Victoria
Communications Group Inc. (up to the date of disposal in July
2018), and IntegraMed America, Inc. (IntegraMed).
|
|
[3]
|
Attributable to
participating shareholders.
|
|
Income (Loss) –
Sagard Investment Funds, China AMC and Other
Investments
|
|
|
|
|
(unaudited)
|
Three months
ended
|
Nine months
ended
|
|
(in millions of
Canadian dollars)
|
September
30,
|
September
30,
|
|
2019
|
2018
|
2019
|
2018
|
|
Sagard Investment
Funds [1]
|
|
|
|
|
|
Sagard
Europe
|
(2)
|
(3)
|
(15)
|
163
|
|
Sagard
Holdings [2][3]
|
(10)
|
7
|
(18)
|
(27)
|
|
Sagard
China
|
17
|
(35)
|
85
|
13
|
|
China AMC
|
8
|
6
|
23
|
22
|
|
Other
Investments
|
|
|
|
|
|
Investment and hedge
funds, and other [4]
|
3
|
(3)
|
21
|
13
|
|
16
|
(28)
|
96
|
184
|
|
|
|
[1]
|
Income (loss) from
investments for the Sagard Investment Funds is presented net of
expenses of their separate dedicated teams.
|
|
[2]
|
Excludes the
Corporation's share of the operating results of IntegraMed
presented in "Other subsidiaries".
|
|
[3]
|
Includes share of
earnings (losses) from investments in a jointly controlled
corporation and associates. The third quarter of 2019 includes a
charge for an impairment of an equity-accounted investment and the
second quarter of 2018 includes a loss attributable to the
recognition of non-cash provisions in an investment.
|
|
[4]
|
Consists mainly of
foreign exchange gains or losses and interest on cash and cash
equivalents.
|
|
Sagard Investment
Funds
|
|
|
|
|
(unaudited)
|
|
|
|
(in millions of
Canadian dollars)
|
September 30,
2019
|
December 31,
2018
|
|
Sagard
Europe
|
Sagard
Holdings
|
Sagard
China
|
Total
|
Sagard
Europe
|
Sagard
Holdings
|
Sagard
China
|
Total
|
|
Cost
|
318
|
373
|
522
|
1,213
|
280
|
342
|
515
|
1,137
|
|
Unrealized gain
(loss)
|
95
|
2
|
65
|
162
|
111
|
14
|
(5)
|
120
|
|
Fair value of
non-controlled portfolio
investments
|
413
|
375
|
587
|
1,375
|
391
|
356
|
510
|
1,257
|
|
Cash
|
−
|
132
|
63
|
195
|
−
|
185
|
162
|
347
|
|
Fair value
adjustments and other [1]
|
−
|
33
|
51
|
84
|
−
|
38
|
(3)
|
35
|
|
Total fair
value
|
413
|
540
|
701
|
1,654
|
391
|
579
|
669
|
1,639
|
|
|
|
[1]
|
Fair value
adjustments of investments not carried at fair value in the
Corporation's financial statements and receivables from pending
trades of
$53 million in Sagard China.
|
|
Other
Items
|
|
|
|
|
(unaudited)
|
Three months
ended
|
Nine months
ended
|
|
(in millions of
Canadian dollars)
|
September
30,
|
September
30,
|
|
2019
|
2018
|
2019
|
2018
|
|
Share of Lifeco's
Other items:
|
|
|
|
|
|
Net charge on the
sale, via reinsurance, of U.S.
individual life insurance and annuity business
|
−
|
−
|
(86)
|
−
|
|
Restructuring
charges
|
−
|
(25)
|
−
|
(25)
|
|
−
|
(25)
|
(86)
|
(25)
|
|
Per
share
|
−
|
(0.06)
|
(0.19)
|
(0.06)
|
|
Share of IGM's Other
items:
|
|
|
|
|
|
Restructuring and
other charges
|
−
|
(7)
|
−
|
(7)
|
|
Premium paid on early
redemption of debentures
|
−
|
(3)
|
−
|
(3)
|
|
Share of Lifeco's
Other items
|
−
|
(1)
|
(3)
|
(1)
|
|
−
|
(11)
|
(3)
|
(11)
|
|
Per
share
|
−
|
(0.02)
|
(0.01)
|
(0.02)
|
|
Share of Pargesa's
Other items:
|
|
|
|
|
|
Imerys –
Restructuring charges and other
|
−
|
−
|
(5)
|
−
|
|
Other
|
(4)
|
−
|
(4)
|
−
|
|
(4)
|
−
|
(9)
|
−
|
|
Per
share
|
(0.01)
|
−
|
(0.02)
|
−
|
|
Corporate
operations
|
|
|
|
|
|
Reduction of income
tax estimates
|
31
|
−
|
31
|
−
|
|
Divestiture of La
Presse operations
|
−
|
(54)
|
−
|
(54)
|
|
Premium paid on early
redemption of debentures
|
−
|
(7)
|
−
|
(7)
|
|
31
|
(61)
|
31
|
(61)
|
|
Per
share
|
0.07
|
(0.13)
|
0.07
|
(0.13)
|
|
27
|
(97)
|
(67)
|
(97)
|
|
Per
share
|
0.06
|
(0.21)
|
(0.15)
|
(0.21)
|
Non-IFRS Financial Measures and Presentation
Net earnings attributable to participating shareholders are
comprised of:
- Adjusted net earnings attributable to participating
shareholders; and
- Other items, 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
by a subsidiary or a jointly controlled corporation.
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.
Adjusted net 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 part of
ongoing activities are excluded from this non-IFRS measure.
Adjusted net earnings attributable to participating shareholders
and adjusted net 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 whereby the
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.
This news release may also contain other non-IFRS financial
measures which are publicly disclosed by the Corporation's
subsidiaries such as sales, assets under management and assets
under administration. Refer to the "Non-IFRS Financial Measures and
Presentation" section of the Corporation's most recent Management's
Discussion and Analysis for the definition of non-IFRS financial
measures and their reconciliation with IFRS financial measures.
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.
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, including the fintech strategy, 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,
fluctuations in interest rates, inflation and foreign exchange
rates, monetary policies, business investment and the health of
local and global equity and capital markets, management of market
liquidity and funding risks, risks related to investments in
private companies and illiquid securities, risks associated with
financial instruments, changes in accounting policies and methods
used to report financial condition (including uncertainties
associated with significant judgments, estimates and assumptions),
the effect of applying future accounting changes, business
competition, operational and reputational risks, technological
changes, cybersecurity risks, 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