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Press release from CNW Group

Power Financial Corporation Reports First Quarter 2013 Financial Results and Dividends

Tuesday, May 14, 2013

Power Financial Corporation Reports First Quarter 2013 Financial Results and Dividends

12:06 EDT Tuesday, May 14, 2013

Readers are referred to the sections entitled "Non-IFRS Financial Measures" and "Forward-Looking Statements" at the end of this release.

WINNIPEG, May 14, 2013 /CNW Telbec/ - Power Financial Corporation (TSX: PWF) today reported earnings results for the three months ended March 31, 2013.

FIRST QUARTER RESULTS
Operating earnings attributable to common shareholders, a non-IFRS financial measure, for the quarter ended March 31, 2013 were $407 million or $0.57 per share, compared with $371 million or $0.52 per share in the corresponding period in 2012, an increase of 9.5% on a per share basis.

Other items, not included in operating earnings, for the first quarter of 2013 resulted in a net charge of $13 million, compared with a contribution of $83 million in the corresponding quarter of 2012. Additional details on other items can be found in the sections entitled "Pargesa Holding SA" and "Earnings Summary" below.

Net earnings attributable to common shareholders for the quarter ended March 31, 2013 were $394 million or $0.55 per share, compared with $454 million or $0.64 per share in the corresponding quarter of 2012.

RESULTS OF GREAT-WEST LIFECO, IGM FINANCIAL AND PARGESA

GREAT-WEST LIFECO INC.
For the quarter ended March 31, 2013, Great-West Lifeco Inc. (Lifeco) reported operating and net earnings attributable to common shareholders of $517 million or $0.544 per share, compared with $449 million or $0.474 per share in the corresponding period of 2012.

As at March 31, 2013, Power Financial and IGM Financial Inc. (IGM) held 68.1% and 4.0%, respectively, of Lifeco's common shares. Lifeco's contribution to Power Financial's operating earnings was $353 million for the quarter ended March 31, 2013, compared with $306 million in the same period in 2012.

IGM FINANCIAL INC.
For the quarter ended March 31, 2013, IGM reported operating and net earnings available to common shareholders of $181 million or $0.72 per share, compared with $199 million or $0.77 per share in the same period in 2012.

As at March 31, 2013, Power Financial and The Great-West Life Assurance Company, a subsidiary of Lifeco, held 58.7% and 3.7%, respectively, of IGM's common shares. IGM contributed $107 million to Power Financial's operating earnings for the quarter ended March 31, 2013, compared with $114 million for the corresponding period in 2012.

PARGESA HOLDING SA
For the quarter ended March 31, 2013, Pargesa Holding SA (Pargesa) reported an operating loss of SF17 million, compared with an operating loss of SF9 million in the corresponding period in 2012. Other items, not included in operating earnings, in the first quarter of 2013 resulted in a net charge of SF44 million, which consisted of Pargesa's share of an impairment charge recorded by its subsidiary Groupe Bruxelles Lambert in connection with its investment in GDF Suez. In the first quarter of 2012, other items represented a contribution of SF271 million. Net loss for the first quarter of 2013 was SF61 million, compared with net earnings of SF262 million in the corresponding quarter of 2012.

Power Financial has a 50% interest in Parjointco N.V., which in turn held a 55.6% equity interest in Pargesa at March 31, 2013. Pargesa's contribution to Power Financial's operating earnings, expressed in Canadian dollars, was a charge of $5 million for the three-month period ended March 31, 2013, compared with a charge of $3 million in the corresponding period in 2012.

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 July 25, 2013 August 15, 2013 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 July 10, 2013 July 31, 2013 34.375¢
Series E - PWF.PR.F July 10, 2013 July 31, 2013 32.8125¢
Series F - PWF.PR.G July 10, 2013 July 31, 2013 36.875¢
Series H - PWF.PR.H July 10, 2013 July 31, 2013 35.9375¢
Series I - PWF.PR.I July 10, 2013 July 31, 2013 37.50¢
Series K - PWF.PR.K July 10, 2013 July 31, 2013 30.9375¢
Series L - PWF.PR.L July 10, 2013 July 31, 2013 31.875¢
Series M - PWF.PR.M July 10, 2013 July 31, 2013 37.50¢
Series O - PWF.PR.O July 10, 2013 July 31, 2013 36.25¢
Series P - PWF.PR.P July 10, 2013 July 31, 2013 27.50¢
Series R - PWF.PR.R July 10, 2013 July 31, 2013 34.375¢
Series S - PWF.PR.S July 10, 2013 July 31, 2013 30¢
[1] In accordance with the articles of the Corporation

DIVIDEND ON COMMON SHARES
The Board of Directors also declared a quarterly dividend of 35 cents per share on the Corporation's common shares payable August 1, 2013 to shareholders of record on June 28, 2013.

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.

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 substantial holdings in a diversified industrial group 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  
  March 31,
2013
  March 31,
2012
(1)
Contribution to operating earnings from subsidiaries and Parjointco        
  Lifeco 353   306  
  IGM 107   114  
  Pargesa (2) (5)   (3)  
  455   417  
Results from corporate activities (16)   (17)  
Dividends on perpetual preferred shares (32)   (29)  
Operating earnings attributable to common shareholders 407   371  
Other items (see below) (13)   83  
Net earnings attributable to common shareholders 394   454  
Earnings per share (attributable to common shareholders)        
  - operating earnings 0.57   0.52  
  - non-operating earnings (0.02)   0.12  
  - net earnings 0.55   0.64  
         
OTHER ITEMS        
     
(unaudited) Three months ended  
  March 31,
2013
  March 31,
2012
 
Share of Pargesa's other items        
  Impairment charge on GDF Suez (13)      
  Gain on partial disposal of Pernod Ricard     46  
  Gain on disposal of Arkema     43  
  Other (charge) income     (6)  
  (13)   83  
(1) Effective January 1, 2013, the Corporation adopted revised IAS 19 (IAS 19R), Employee Benefits.
In accordance with the required transitional provisions, the Corporation retrospectively applied
the revised standard. The 2012 comparative financial information in this report has been
restated accordingly.
(2) Power Financial has a 50% interest in Parjointco N.V., which in turn held a 55.6% equity
interest in Pargesa at March 31, 2013.


Non-IFRS Financial Measures
In analyzing the financial results of the Corporation and consistent with the presentation in previous years, net earnings attributable to common shareholders are classified into the following components:

  • operating earnings attributable to common shareholders; and
  • other items or non-operating earnings, which include the after-tax impact of any item that management considers to be of a non-recurring nature or that could make the period-over-period comparison of results from operations less meaningful, and also include the Corporation's share of any such item presented in a comparable manner by its subsidiaries and jointly controlled corporation.

However, 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 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.

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

For further information:

Mr. Stéphane Lemay
Vice-President,
General Counsel and Secretary
514-286-7400

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