Readers are referred to the sections "Non-IFRS Financial Measures and Presentation" and "Forward-Looking Statements" at the end of this release.
MONTRÉAL, Nov. 7, 2019 /CNW Telbec/ - Power Financial Corporation (TSX: PWF) today reported earnings results for the three and nine months ended September 30, 2019.
Power Financial
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 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 (a non-IFRS financial measure) 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] |
The Corporation completed a substantial issuer bid in the second quarter of 2019 and repurchased 7.0% of its common shares. |
[2] |
As a result of the Corporation's participation in Lifeco's substantial issuer bid, in the second quarter of 2019, the number of shares held by the Corporation 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 the Corporation's share of other charges at Pargesa related to Parques Reunidos Servicios Centrales, S.A., an equity investment. 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, compared with a charge of $0.07 per share or $55 million in 2018.
Great-West Lifeco, IGM Financial and Pargesa
Results for the period ended September 30
GREAT-WEST LIFECO INC.
Third Quarter
Net earnings attributable to common shareholders and adjusted net earnings were $0.79 per Lifeco share or $730 million, compared with net earnings of $0.70 per share or $689 million and adjusted net earnings of $0.75 per share or $745 million in 2018. Other items, not included in adjusted net earnings, were a charge of $0.05 per share or $56 million in 2018.
Nine Months
Net earnings attributable to common shareholders were $1.94 per Lifeco share or $1,846 million, compared with $2.28 per share or $2,251 million in 2018.
Adjusted net earnings attributable to common shareholders were $2.15 per share or $2,045 million, compared with $2.33 per share or $2,307 million in 2018. Other items, not included in adjusted net earnings, were a charge of $0.21 per share or $199 million relating to the sale, via indemnity reinsurance, of the U.S. individual life insurance and annuity business. Other items were a charge of $0.05 per share or $56 million in 2018.
IGM FINANCIAL INC.
Third Quarter
Net earnings available to common shareholders and adjusted net earnings were $0.85 per IGM share or $202 million, compared with net earnings of $0.82 per share or $198 million and adjusted net earnings of $0.92 per share or $223 million in 2018. Other items, not included in adjusted net earnings, were a charge of $0.10 per share or $25 million in 2018.
Nine Months
Net earnings available to common shareholders were $2.32 per IGM share or $555 million, compared with $2.44 per share or $587 million in 2018.
Adjusted net earnings available to common shareholders were $2.35 per share or $563 million, compared with $2.54 per share or $612 million in 2018. Other items, not included in adjusted net earnings, were a charge $0.03 per share or $8 million relating to IGM's proportionate share of Lifeco's other items. Other items were a charge of $0.10 per share or $25 million in 2018.
PARGESA HOLDING SA
Third Quarter
Pargesa reported net earnings of SF91 million, compared with SF38 million in 2018. See contribution to Power Financial's earnings in the tables below.
Nine Months
Pargesa reported net earnings of SF316 million, compared with SF251 million in 2018.
Dividends on Power Financial Common Shares
The Board of Directors today declared a quarterly dividend of 45.55 cents on the Corporation's common shares, payable January 31, 2020 to shareholders of record December 31, 2019.
Dividends on Power Financial Preferred Shares
The Board of Directors also declared quarterly dividends on the Corporation's preferred shares.
Dividends payable February 15, 2020 to shareholders of record January 24, 2020:
Series – Stock Symbol |
Amount |
Series A – PWF.PR.A |
Floating rate [1] |
[1] Equal to one quarter of 70% of the average prime rate of two major Canadian chartered banks for the period October 1 to December 31, 2019. |
Dividends payable January 31, 2020 to shareholders of record January 10, 2020:
Series |
Stock Symbol |
Amount |
Series |
Stock Symbol |
Amount |
|
Series D |
PWF.PR.E |
34.375¢ |
Series O |
PWF.PR.O |
36.25¢ |
|
Series E |
PWF.PR.F |
32.8125¢ |
Series P |
PWF.PR.P |
14.4125¢ |
|
Series F |
PWF.PR.G |
36.875¢ |
Series Q |
PWF.PR.Q |
20.2904¢ |
|
Series H |
PWF.PR.H |
35.9375¢ |
Series R |
PWF.PR.R |
34.375¢ |
|
Series I |
PWF.PR.I |
37.50¢ |
Series S |
PWF.PR.S |
30¢ |
|
Series K |
PWF.PR.K |
30.9375¢ |
Series T |
PWF.PR.T |
26.3438¢ |
|
Series L |
PWF.PR.L |
31.875¢ |
Series V |
PWF.PR.Z |
32.1875¢ |
About Power Financial
Power Financial Corporation is a diversified international management and holding company with interests substantially in the financial services sector in Canada, the United States and Europe. It also has significant holdings in global industrial and services companies based in Europe. Power Financial Corporation is a member of the Power Corporation Group of Companies. To learn more, visit www.PowerFinancial.com.
At September 30, 2019, Power Financial held the following economic interests:
- 66.8% – Great-West Lifeco (TSX: GWO) www.greatwestlifeco.com
- 62.1% – IGM Financial (TSX: IGM) www.igmfinancial.com
- 27.8% – Pargesa Holding (SIX: PARG) www.pargesa.ch
- 84.8% – Wealthsimple Financial Corp. [1] www.wealthsimple.com
[1] |
Undiluted equity interest held by Lifeco, IGM and the Corporation. |
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 |
|||||||
Lifeco [1] |
0.74 |
0.71 |
2.01 |
2.19 |
|||
IGM [1] |
0.19 |
0.18 |
0.51 |
0.50 |
|||
Pargesa [1] |
0.05 |
0.02 |
0.25 |
0.13 |
|||
0.98 |
0.91 |
2.77 |
2.82 |
||||
Corporate operations [2] |
(0.04) |
(0.05) |
(0.11) |
(0.12) |
|||
Dividends on perpetual preferred shares |
(0.05) |
(0.05) |
(0.15) |
(0.15) |
|||
Adjusted net earnings per share [3] |
0.89 |
0.81 |
2.51 |
2.55 |
|||
Other items – see below |
(0.01) |
(0.07) |
(0.22) |
(0.07) |
|||
Net earnings per share [3] |
0.88 |
0.74 |
2.29 |
2.48 |
|||
Earnings |
|||||||
(unaudited) |
Three months ended |
Nine months ended |
|||||
(in millions of Canadian dollars) |
September 30, |
September 30, |
|||||
2019 |
2018 |
2019 |
2018 |
||||
Adjusted net earnings |
|||||||
Lifeco [1] |
488 |
503 |
1,372 |
1,560 |
|||
IGM [1] |
124 |
129 |
349 |
357 |
|||
Pargesa [1] |
35 |
12 |
174 |
92 |
|||
647 |
644 |
1,895 |
2,009 |
||||
Corporate operations [2] |
(22) |
(31) |
(76) |
(83) |
|||
Dividends on perpetual preferred shares |
(35) |
(35) |
(104) |
(104) |
|||
Adjusted net earnings [3] |
590 |
578 |
1,715 |
1,822 |
|||
Other items – see below |
(6) |
(55) |
(152) |
(55) |
|||
Net earnings [3] |
584 |
523 |
1,563 |
1,767 |
|||
[1] |
The contributions from Lifeco and IGM include an allocation of the results of Wealthsimple Financial Corp., KOHO Financial Inc., Portag3 Ventures Limited Partnership, and Portag3 Ventures II Limited Partnership, based on their respective interests. The contributions from IGM and Pargesa reflect adjustments in accordance with IAS 39. |
[2] |
Includes operating expenses, financing charges, depreciation, income taxes, interest on cash and cash equivalents, foreign exchange gains (losses) and income (losses) from investments. |
[3] |
Attributable to common shareholders. |
Other Items |
||||||||
(unaudited) |
Three months ended September 30, |
Nine months ended |
||||||
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 |
− |
− |
(134) |
− |
||||
Restructuring charges |
− |
(38) |
− |
(38) |
||||
Share of IGM's Other items |
− |
(1) |
− |
(1) |
||||
− |
(39) |
(134) |
(39) |
|||||
Per share |
− |
(0.05) |
(0.19) |
(0.05) |
||||
Share of IGM's Other items: |
||||||||
Restructuring and other charges |
− |
(10) |
− |
(10) |
||||
Premium paid on early redemption of debentures |
− |
(5) |
− |
(5) |
||||
Share of Lifeco's Other items |
− |
(1) |
(5) |
(1) |
||||
− |
(16) |
(5) |
(16) |
|||||
Per share |
− |
(0.02) |
(0.01) |
(0.02) |
||||
Share of Pargesa's Other items: |
||||||||
Imerys – Restructuring charges and other |
− |
− |
(7) |
− |
||||
Other |
(6) |
− |
(6) |
− |
||||
(6) |
− |
(13) |
− |
|||||
Per share |
(0.01) |
− |
(0.02) |
− |
||||
(6) |
(55) |
(152) |
(55) |
|||||
Per share |
(0.01) |
(0.07) |
(0.22) |
(0.07) |
||||
Contribution to Power Financial's Adjusted Net Earnings |
||||
Three months ended September 30, 2019 (unaudited) (in millions of Canadian dollars) |
Contribution to adjusted net earnings as reported |
Consolidation entries [1] |
Contribution to Power Financial's adjusted net earnings |
|
Lifeco |
488 |
− |
488 |
|
IGM |
126 |
(2) |
124 |
|
Pargesa |
40 |
(5) |
35 |
|
Nine months ended September 30, 2019 (unaudited) (in millions of Canadian dollars) |
Contribution to adjusted net earnings as reported |
Consolidation entries [1] |
Contribution to Power Financial's adjusted net earnings |
|
Lifeco |
1,374 |
(2) |
1,372 |
|
IGM |
348 |
1 |
349 |
|
Pargesa |
130 |
44 |
174 |
[1] |
The contributions from Lifeco and IGM include an allocation of the results of Wealthsimple Financial Corp., KOHO Financial Inc., Portag3 Ventures Limited Partnership, and Portag3 Ventures II Limited Partnership, based on their respective interests. The contributions from IGM and Pargesa reflect adjustments in accordance with IAS 39. |
Adjustments to Pargesa's Contribution |
Power Financial has deferred the adoption of IFRS 9 and continues to apply IAS 39. The following table presents adjustments to the contribution of Pargesa to Power Financial's earnings in accordance with IAS 39: |
(unaudited) |
2019 |
||||||||||
(in millions of Canadian dollars) |
Q3 |
Q2 |
Q1 |
Total |
|||||||
Partial disposal of interest in adidas [1] |
− |
53 |
18 |
71 |
|||||||
Impairment charges on Ontex N.V. [1] |
− |
(13) |
− |
(13) |
|||||||
Disposal of private equity funds |
1 |
− |
− |
1 |
|||||||
Reversal of unrealized gains on private equity funds |
(6) |
(3) |
(6) |
(15) |
|||||||
Total |
(5) |
37 |
12 |
44 |
[1] |
On January 1, 2018, Pargesa adopted IFRS 9 which resulted in the reclassification of the majority of its investments (excluding private equity funds) from available for sale (AFS) to fair value through other comprehensive income (FVOCI). All changes in fair value of equity investments designated as FVOCI are recognized permanently in other comprehensive income. Power Financial continues to apply IAS 39 and has adjusted its share of these items. |
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, IGM, Portag3 Ventures Limited Partnership, Portag3 Ventures II Limited Partnership, Wealthsimple Financial Corp. and KOHO Financial Inc. 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 and common 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 Financial Corporation
Stéphane Lemay, Vice-President, General Counsel and Secretary, 514-286-7400
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