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Power Corporation Reports First Quarter 2020 Financial Results
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Canada NewsWire
MONTRÉAL, May 15, 2020
Readers are referred to the sections "Non-IFRS Financial Measures and Presentation" and "Forward-Looking Statements" at the end of this release.
MONTRÉAL, May 15, 2020 /CNW Telbec/ - Power Corporation of Canada (Power Corporation or the Corporation) (TSX: POW) today reported earnings results for the three months ended March 31, 2020.
Power Corporation
Consolidated results for the period ended March 31
Highlights
- Power Corporation and Power Financial Corporation (Power Financial) completed a reorganization on February 13, 2020. Power Corporation now holds 100% of the issued and outstanding Power Financial common shares.
- The Corporation completed share buy backs under its normal course issuer bid of 7.4 million Subordinate Voting Shares, for $193 million in the quarter.
- Power Corporation declared a quarterly dividend of $0.4475 per participating share payable July 31, 2020. The dividend payment schedule in 2020 was moved ahead by two months and represents a 10.5% increase in comparison with 2019.
- Great-West Lifeco Inc.'s (Lifeco) consolidated assets under administration at March 31, 2020 were $1.5 trillion, a 6% decrease from December 31, 2019 primarily reflecting the COVID-19 market declines.
- Lifeco declared a quarterly dividend of $0.4380 per common share payable June 30, 2020, unchanged from last quarter.
- IGM Financial Inc. (IGM) assets under management at March 31, 2020 of $147.5 billion, a decrease of 8.1% from the prior year and 11.6% from December 31, 2019, due to financial market declines related to COVID-19.
- IGM declared a quarterly common share dividend of $0.5625 per common share payable July 31, 2020, unchanged from the last quarter.
- At its annual general meeting held on May 6, 2020, Pargesa Holding SA (Pargesa) approved a dividend of SF2.63 per share, a 2.7% increase.
- Parjointco N.V. and Pargesa announced on March 11, 2020 a public exchange offer for all Pargesa shares not held by Parjointco to be exchanged for Groupe Bruxelles Lambert (GBL) shares. The offer, which is subject to certain restrictions, is open for acceptance from May 8 to June 8, 2020.
COVID-19
The outbreak of the novel strain of coronavirus, specifically identified as "COVID-19", has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown. Global equity markets have experienced significant volatility and weakness. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions.
At Power Corporation and its group companies, the focus has continued to be on managing the safety and well-being of its people, maintaining operational effectiveness, ensuring that the group can serve its customers, assessing impacts on earnings, liquidity and capital, planning for different potential scenarios and engaging with stakeholders. The respective boards of directors of Power Financial, Lifeco, IGM, Pargesa and GBL utilize their governance structures and processes to oversee the management of the risk and potential impacts presented by the current economic slowdown and other potential consequences due to COVID-19.
The duration and impact of the COVID-19 pandemic is unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Corporation and its operating subsidiaries in future periods.
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First Quarter
Net earnings attributable to participating shareholders were $200 million or $0.36 per share, compared with $292 million or $0.63 per share in 2019.
Adjusted net earnings attributable to participating shareholders (a non-IFRS financial measure, see Non-IFRS Financial Measures and Presentation below) were $345 million or $0.62 per share, compared with $251 million or $0.54 per share in 2019.
Contributions to Power Corporation's net earnings per share and adjusted net earnings per share were:
| | | | 2020 [1] | 2019 | |
| (in dollars per Power Corporation share) | Net Earnings | Adjusted | Net Earnings | Adjusted | |
| - Lifeco [2] | 0.27 | 0.52 | 0.63 | 0.55 | |
| - IGM | 0.13 | 0.14 | 0.15 | 0.14 | |
| - Pargesa | 0.08 | 0.08 | 0.07 | 0.07 | |
| - Investment Platforms [3] | 0.05 | 0.05 | (0.04) | (0.04) | |
| - China AMC [4] | 0.02 | 0.02 | 0.02 | 0.02 | |
| - Corporate Operations [5] | (0.19) | (0.19) | (0.20) | (0.20) | |
| | 0.36 | 0.62 | 0.63 | 0.54 | |
| | | | | | |
| [1] | The Corporation completed the Reorganization on February 13, 2020 and now holds 100% of Power Financial. In the second quarter of 2019, the Corporation completed a substantial issuer bid and repurchased 9.8% of its Subordinated Voting Shares. | |
| [2] | Power Financial participated in Lifeco's substantial issuer bid, in the second quarter of 2019; the number of shares held by Power Financial decreased by 7.4%. | |
| [3] | Investment platforms includes earnings (losses) from Power Energy Corporation (Power Energy), and IntegraMed America, Inc. (IntegraMed). | |
| [4] | China Asset Management Co., Ltd. | |
| [5] | Operating and other expenses, Dividends on non-participating shares of the Corporation and its share of Power Financial. | |
Adjustments in 2020, excluded from adjusted net earnings, were a negative net impact of $145 million or $0.26 per share mainly related to the Corporation's share of Lifeco's adjustments which consist of market-related impacts as well as actuarial assumption changes and management actions. Adjustments in the first quarter of 2019 were a net positive earnings impact of $41 million related to the market-related impacts as well as actuarial assumption changes.
Non-IFRS Financial Measure – Adjusted Net Earnings
Effective the first quarter of 2020, the Corporation introduced an enhanced definition of its non-IFRS earnings measure, Adjusted net earnings. This change is consistent with the introduction of base earnings by Lifeco which was introduced in the first quarter of 2020 to reflect management's view of the operating performance of Lifeco. The definition of Adjustments has been enhanced to include Lifeco's impact of actuarial assumption changes and management actions and direct equity and interest rate market impacts on insurance contract liabilities net of hedging. The comparative periods have been restated to reflect the introduction of this enhanced measure. For additional information, please refer to the Non-IFRS Financial Measures and Presentation section further in this news release.
Great-West Lifeco, IGM Financial and Pargesa
Results for the period ended March 31
GREAT-WEST LIFECO INC.
First Quarter
Net earnings attributable to common shareholders were $342 million or $0.37 per share, compared with $657 million or $0.67 per share in 2019. The sale of U.S. individual life insurance and annuity business closed in the second quarter of 2019, Lifeco's net earnings and adjusted net earnings for the first quarter of 2020 do not include any earnings from this business, which contributed $33 million to net earnings and adjusted net earnings in the first quarter of 2019. Reported net earnings per share for the first quarter of 2020 was $0.37, down from $0.67 in 2019, primarily due to approximately $300 million of market-related impacts including unfavourable basis changes reflecting significant market declines and volatility in the first quarter of 2020 driven by the COVID-19 pandemic.
Adjusted net earnings [1] attributable to common shareholders were $543 million or $0.59 per share, compared with $569 million or $0.58 per share in 2019.
| [1] | Described as base earnings by Lifeco. For additional information, please refer to the Non-IFRS Financial Measures and Presentation section further in this news release. |
IGM FINANCIAL INC.
First Quarter
Net earnings available to common shareholders were $161 million or $0.68 per share, compared with $168 million or $0.70 per share in 2019.
Assets under management at March 31, 2020 were $147.5 billion, a decrease of 11.6% in the quarter, due to financial market declines related to COVID-19.
PARGESA HOLDING SA
First Quarter
Pargesa reported net earnings of SF6 million, compared with SF91 million in 2019.
Adjusted net earnings were SF11 million, compared with SF94 million in 2019. Adjustments, not included in adjusted net earnings, were a charge of SF5 million in the first quarter.
Pargesa reported a net asset value at March 31, 2020 of SF8,300 million, representing SF98.0 per share, compared with SF10,946 million or SF129.2 per share at December 31, 2019.
Pargesa adopted IFRS 9 in 2018. Power Corporation continues to apply IAS 39; this results in an increase in its share of the contribution from Pargesa of $42 million in the first quarter of 2020.
Investment Platforms
For the period ended March 31
Investment platforms includes income earned from management fees net of investment platform expenses, income earned on the capital invested by the Corporation (proprietary capital) in each platform and the share of earnings (losses) of controlled and consolidated subsidiaries, associates and jointly controlled investments. For additional information, refer to the table further in this news release.
First Quarter
Income from the Corporation's investment platforms was $32 million, compared with a loss of $16 million in 2019.
Dividend on Power Corporation Participating Shares
The Board of Directors declared a quarterly dividend of 44.75 cents per share on the Participating Preferred Shares and the Subordinate Voting Shares of the Corporation, payable July 31, 2020 to shareholders of record June 30, 2020.
Dividend on Power Corporation Non-Participating Preferred Shares
The Board of Directors also declared quarterly dividends on the Corporation's preferred shares, payable July 15, 2020 to shareholders of record June 24, 2020:
| | | | | | |
| 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 Werbung Mehr Nachrichten zur Power Corporation Of Canada Aktie kostenlos abonnieren
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