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Press release from CNW Group

Power Financial Corporation Reports 2013 Second Quarter and Six-Month Financial Results and Dividends

Friday, August 02, 2013

Power Financial Corporation Reports 2013 Second Quarter and Six-Month Financial Results and Dividends

09:47 EDT Friday, August 02, 2013

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

WINNIPEG, Aug. 2, 2013 /CNW Telbec/ - Power Financial Corporation (TSX: PWF) today reported earnings results for the second quarter and six months ended June 30, 2013.

SECOND QUARTER RESULTS
Operating earnings attributable to common shareholders, a non-IFRS financial measure, for the quarter ended June 30, 2013 were $464 million or $0.65 per share, compared with $444 million or $0.63 per share in the corresponding period in 2012, an increase of 4.1% on a per share basis.

Other items, not included in operating earnings, resulted in a contribution of $11 million, compared with a net charge of $15 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 were $475 million or $0.67 per share, compared with $429 million or $0.61 per share in the corresponding quarter of 2012.

SIX-MONTH RESULTS
Operating earnings attributable to common shareholders for the six months ended June 30, 2013 were $871 million or $1.22 per share, compared with $815 million or $1.15 per share in the corresponding period in 2012, an increase of 6.6% on a per share basis.

Other items, not included in operating earnings, resulted in a net charge of $2 million, compared with a contribution of $68 million in the corresponding period in 2012.

Net earnings attributable to common shareholders were $869 million or $1.22 per share, compared with $883 million or $1.25 per share for the same period in 2012.

RESULTS OF GREAT-WEST LIFECO, IGM FINANCIAL AND PARGESA

GREAT-WEST LIFECO INC.
For the quarter ended June 30, 2013, Great-West Lifeco Inc. (Lifeco) reported operating and net earnings attributable to common shareholders of $521 million or $0.548 per share, compared with $488 million or $0.512 per share in the corresponding period in 2012.

For the six-month period ended June 30, 2013, Lifeco reported operating and net earnings attributable to common shareholders of $1,038 million or $1.092 per share, compared with $937 million or $0.986 per share in the corresponding period in 2012.

As at June 30, 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 $355 million for the quarter ended June 30, 2013, compared with $332 million in the same period in 2012. For the six months ended June 30, 2013, Lifeco's contribution to Power Financial's operating earnings was $708 million, compared with $638 million in the corresponding period in 2012.

IGM FINANCIAL INC.
For the quarter ended June 30, 2013, IGM reported operating earnings available to common shareholders of $191 million or $0.76 per share, compared with $178 million or $0.69 per share in the same period in 2012.

For the six-month period ended June 30, 2013, IGM reported operating earnings available to common shareholders of $371 million or $1.47 per share, compared with $377 million or $1.47 per share in the corresponding period in 2012.

As at June 30, 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 $112 million to Power Financial's operating earnings for the quarter ended June 30, 2013, compared with $104 million for the corresponding period in 2012. For the six months ended June 30, 2013, IGM's contribution to Power Financial's operating earnings was $219 million, compared with $218 million in the corresponding period in 2012.

PARGESA HOLDING SA
For the quarter ended June 30, 2013, Pargesa Holding SA (Pargesa) reported operating earnings of SF135 million, compared with SF182 million in the corresponding period in 2012.

For the six months ended June 30, 2013, Pargesa reported operating earnings of SF118 million, compared with SF173 million in the same period in 2012.

Other items, not included in operating earnings, in the second quarter of 2013 represented a contribution of SF36 million, which mainly consisted of Pargesa's share of a gain recorded by its subsidiary Groupe Bruxelles Lambert (GBL) on the partial disposal of its interest in GDF Suez. In addition, in the first quarter of 2013, other items included an impairment charge recorded by GBL in connection with its investment in GDF Suez. Other items for the three months ended June 30, 2012 were a charge of SF37 million and, for the six months ended June 30, 2012, a contribution of SF234 million.

Net earnings for the second quarter of 2013 were SF171 million, compared with SF145 million in the corresponding quarter in 2012. For the six-month period ended June 30, 2013, net earnings were SF110 million, compared with SF407 million in the corresponding period in 2012.

Power Financial has a 50% interest in Parjointco N.V., which in turn held a 55.6% equity interest in Pargesa at June 30, 2013. Pargesa's contribution to Power Financial's operating earnings, expressed in Canadian dollars, was $40 million for the three-month period ended June 30, 2013, compared with $55 million in the corresponding period in 2012. For the six-month period ended June 30, 2013, Pargesa's contribution to Power Financial's operating earnings was $35 million, compared with $52 million in the same 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 October 25, 2013 November 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 October 10, 2013 October 31, 2013 34.375¢
Series E - PWF.PR.F October 10, 2013 October 31, 2013 32.8125¢
Series F - PWF.PR.G October 10, 2013 October 31, 2013 36.875¢
Series H - PWF.PR.H October 10, 2013 October 31, 2013 35.9375¢
Series I - PWF.PR.I October 10, 2013 October 31, 2013 37.50¢
Series K - PWF.PR.K October 10, 2013 October 31, 2013 30.9375¢
Series L - PWF.PR.L October 10, 2013 October 31, 2013 31.875¢
Series M - PWF.PR.M October 10, 2013 October 31, 2013 37.50¢
Series O - PWF.PR.O October 10, 2013 October 31, 2013 36.25¢
Series P - PWF.PR.P October 10, 2013 October 31, 2013 27.50¢
Series R - PWF.PR.R October 10, 2013 October 31, 2013 34.375¢
Series S - PWF.PR.S October 10, 2013 October 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 November 1, 2013 to shareholders of record on September 30, 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) Six months ended   Three months ended  
  June 30,
2013
  June 30,
2012
(1) June 30,
2013
  June 30,
2012
(1)
Contribution to operating earnings from subsidiaries and Parjointco                
  Lifeco 708   638   355   332  
  IGM 219   218   112   104  
  Pargesa (2) 35   52   40   55  
  962   908   507   491  
Results from corporate activities (26)   (35)   (10)   (18)  
Dividends on perpetual preferred shares (65)   (58)   (33)   (29)  
Operating earnings attributable to common shareholders 871   815   464   444  
Other items (see below) (2)   68   11   (15)  
Net earnings attributable to common shareholders 869   883   475   429  
Earnings per share (attributable to common shareholders)                
  - operating earnings 1.22   1.15   0.65   0.63  
  - non-operating earnings -   0.10   0.02   (0.02)  
  - net earnings 1.22   1.25   0.67   0.61  
 
OTHER ITEMS
(unaudited) Six months ended   Three months ended  
  June 30,
2013
  June 30,
2012
  June 30,
2013
  June 30,
2012  
 
Share of IGM's other items                
  Non-cash income tax charge     (4)       (4)  
Share of Pargesa's other items                
  Impairment charges on GDF Suez (13)              
  Gain on partial disposal of GDF Suez 15       15      
  Gain on partial disposal of Pernod Ricard     46          
  Gain on disposal of Arkema     43          
  Other (charge) income (4)   (17)   (4)   (11)  
  (2)   68   11   (15)  
(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 news release 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 June 30, 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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