All figures are in Canadian dollars unless otherwise noted. Readers are referred to the sections "Non-IFRS Financial Measures and Presentation" and "Forward-Looking Statements" at the end of this release.
MONTRÉAL, March 24, 2017 /CNW Telbec/ - Power Financial Corporation (TSX: PWF) today reported earnings results for the fourth quarter and the twelve months ended December 31, 2016.
FOURTH QUARTER RESULTS
Net earnings attributable to common shareholders for the quarter ended December 31, 2016 were $616 million or $0.86 per share, compared with $528 million or $0.74 per share in 2015.
Adjusted net earnings attributable to common shareholders (a non-IFRS financial measure) were $531 million or $0.74 per share, compared with $521 million or $0.73 per share in 2015.
Other items, not included in adjusted net earnings, were a contribution of $85 million, consisting mainly of the Corporation's share of Groupe Bruxelles Lambert's (GBL) gain on the disposal of a 0.7% equity interest in Total SA (Total) and a favourable change in income tax provision estimates related to certain tax filings at IGM Financial Inc. (IGM).
2016 RESULTS
Net earnings attributable to common shareholders for the twelve months ended December 31, 2016 were $1,919 million or $2.69 per share, compared with $2,319 million or $3.25 per share in 2015.
Adjusted net earnings attributable to common shareholders were $2,105 million or $2.95 per share, compared with $2,241 million or $3.14 per share in 2015.
Other items, not included in adjusted net earnings, were a net charge of $186 million. In addition to the fourth quarter items discussed above, other items in the twelve-month period included the Corporation's share of GBL's non-cash impairment charge related to a decrease in LafargeHolcim Ltd's (LafargeHolcim) share price.
RESULTS OF GREAT-WEST LIFECO, IGM FINANCIAL AND PARGESA HOLDING
GREAT-WEST LIFECO INC.
For the quarter ended December 31, 2016, Great-West Lifeco Inc. (Lifeco) reported net earnings attributable to common shareholders of $676 million or $0.686 per share, compared with $683 million or $0.688 per share in 2015.
For the twelve-month period ended December 31, 2016, Lifeco reported net earnings attributable to common shareholders of $2,641 million or $2.668 per share, compared with $2,762 million or $2.774 per share in 2015.
On February 9, 2017, Lifeco announced a 6% increase in the quarterly dividend on its common shares, from $0.3460 to $0.3670 per share, payable March 31, 2017.
At December 31, 2016, Power Financial and IGM held 67.9% and 4.0%, respectively, of Lifeco's common shares. Lifeco's contribution to Power Financial's adjusted net earnings was $459 million for the quarter ended December 31, 2016, compared with $461 million in 2015. For the twelve months ended December 31, 2016, Lifeco's contribution to Power Financial's adjusted net earnings was $1,790 million, compared with $1,862 million in 2015.
IGM FINANCIAL INC.
For the quarter ended December 31, 2016, IGM reported net earnings available to common shareholders of $233 million or $0.97 per share, compared with $174 million or $0.71 per share in 2015. Adjusted net earnings available to common shareholders were $199 million or $0.83 per share, compared with $198 million or $0.81 per share in 2015. Other items, not included in adjusted net earnings, consisted of a favourable change of $34 million in income tax provision estimates related to certain tax filings. Other items in the corresponding quarter of 2015 were an after-tax charge of $24 million.
For the twelve-month period ended December 31, 2016, IGM reported net earnings available to common shareholders of $771 million or $3.19 per share, compared with $772 million or $3.11 per share in 2015. Adjusted net earnings available to common shareholders were $737 million or $3.05 per share, compared with $796 million or $3.21 per share in 2015.
At December 31, 2016, Power Financial and The Great-West Life Assurance Company, a subsidiary of Lifeco, held 61.5% and 3.8%, respectively, of IGM's common shares. IGM contributed $122 million to Power Financial's adjusted net earnings for the quarter ended December 31, 2016, compared with $118 million in 2015. For the twelve months ended December 31, 2016, IGM's contribution to Power Financial's adjusted net earnings was $452 million, compared with $474 million in 2015.
PARGESA HOLDING SA
For the quarter ended December 31, 2016, Pargesa Holding SA (Pargesa) reported net earnings of SF282 million, compared with SF124 million in 2015. Adjusted net earnings were SF40 million, compared with SF1 million in 2015. Other items, not included in adjusted net earnings, represented a contribution of SF242 million, and mainly consisted of Pargesa's share of GBL's gain on the partial disposal of its equity interest in Total.
For the twelve-month period ended December 31, 2016, Pargesa reported a net loss of SF32 million, compared with net earnings of SF638 million in 2015. Adjusted net earnings were SF321 million, compared with SF308 million in 2015. Other items, not included in adjusted net earnings, represented a net charge of SF353 million consisting mainly of Pargesa's share of GBL's impairment charges as a result of a decline in the share price of LafargeHolcim, partially offset by gains on the partial disposal of Total.
At its upcoming annual meeting in May, the board of directors of Pargesa will propose a 2016 dividend of SF2.44 per bearer share, an increase of 2.5% over the previous year, to be paid on May 10, 2017.
At December 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 adjusted net earnings was $15 million for the three-month period ended December 31, 2016, compared with $1 million in 2015. For the twelve-month period ended December 31, 2016, Pargesa's contribution to Power Financial's adjusted net earnings was $119 million, compared with $112 million in 2015.
DIVIDEND ON COMMON SHARES
The Board of Directors today declared an increase of the quarterly dividend from 39.25 cents to 41.25 cents on the Corporation's common shares, payable May 1, 2017 to shareholders of record April 10, 2017.
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 |
April 24, 2017 |
May 15, 2017 |
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 10, 2017 |
April 30, 2017 |
34.375¢ |
| Series E – PWF.PR.F |
April 10, 2017 |
April 30, 2017 |
32.8125¢ |
| Series F – PWF.PR.G |
April 10, 2017 |
April 30, 2017 |
36.875¢ |
| Series H – PWF.PR.H |
April 10, 2017 |
April 30, 2017 |
35.9375¢ |
| Series I – PWF.PR.I |
April 10, 2017 |
April 30, 2017 |
37.50¢ |
| Series K – PWF.PR.K |
April 10, 2017 |
April 30, 2017 |
30.9375¢ |
| Series L – PWF.PR.L |
April 10, 2017 |
April 30, 2017 |
31.875¢ |
| Series O – PWF.PR.O |
April 10, 2017 |
April 30, 2017 |
36.25¢ |
| Series P – PWF.PR.P |
April 10, 2017 |
April 30, 2017 |
14.4125¢ |
| Series Q – PWF.PR.Q |
April 10, 2017 |
April 30, 2017 |
12.6185¢ |
| Series R – PWF.PR.R |
April 10, 2017 |
April 30, 2017 |
34.375¢ |
| Series S – PWF.PR.S |
April 10, 2017 |
April 30, 2017 |
30¢ |
| Series T – PWF.PR.T |
April 10, 2017 |
April 30, 2017 |
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) |
Three months ended |
Twelve months ended |
||||||
| (in millions of Canadian dollars, except per share amounts) |
December 31, |
December 31, |
||||||
| 2016 |
2015 |
2016 |
2015 |
|||||
| Adjusted net earnings [1] |
||||||||
| Lifeco |
459 |
461 |
1,790 |
1,862 |
||||
| IGM |
122 |
118 |
452 |
474 |
||||
| Pargesa |
15 |
1 |
119 |
112 |
||||
| 596 |
580 |
2,361 |
2,448 |
|||||
| Corporate operations [2] |
(34) |
(27) |
(132) |
(77) |
||||
| Dividends on perpetual preferred shares |
(31) |
(32) |
(124) |
(130) |
||||
| Adjusted net earnings [3] |
531 |
521 |
2,105 |
2,241 |
||||
| Other items – see below |
85 |
7 |
(186) |
78 |
||||
| Net earnings [3] |
616 |
528 |
1,919 |
2,319 |
||||
| Earnings per share – Basic [3] |
||||||||
| Adjusted net earnings |
0.74 |
0.73 |
2.95 |
3.14 |
||||
| Other items |
0.12 |
0.01 |
(0.26) |
0.11 |
||||
| Net earnings |
0.86 |
0.74 |
2.69 |
3.25 |
||||
| [1] Previously described as "Operating earnings". |
||||||||
| [2] Includes interest on cash and cash equivalents, foreign exchange gains (losses) and losses |
||||||||
| [3] Attributable to common shareholders. |
||||||||
| OTHER ITEMS |
||||||||
| (unaudited) |
Three months ended |
Twelve months ended |
||||||
| (in millions of Canadian dollars) |
December 31, |
December 31, |
||||||
| 2016 |
2015 |
2016 |
2015 |
|||||
| Share of IGM's other items: |
||||||||
| Reduction of certain income tax estimates |
21 |
– |
21 |
– |
||||
| Restructuring charges |
– |
(15) |
– |
(15) |
||||
| Share of Pargesa's other items: |
||||||||
| Total – Gains on partial disposal |
74 |
48 |
175 |
57 |
||||
| LafargeHolcim – Impairment charges |
– |
– |
(360) |
– |
||||
| Lafarge SA – Reversal of impairment charges |
– |
– |
– |
88 |
||||
| Lafarge SA – Impairment and restructuring charges |
– |
– |
– |
(23) |
||||
| Imerys – Impairment and restructuring charges |
– |
(26) |
– |
(26) |
||||
| Engie – Impairment charges and loss on partial disposal |
(6) |
– |
(15) |
– |
||||
| Other (charges) income |
(4) |
– |
(7) |
(3) |
||||
| 85 |
7 |
(186) |
78 |
|||||
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
Net earnings attributable to common shareholders are comprised of:
- Adjusted net earnings attributable to common 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 Financial, 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 common 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 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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