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Press release from CNW Group

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

Friday, August 02, 2013

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

13:56 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 Corporation of Canada (TSX: POW) today reported earnings results for the second quarter and six months ended June 30, 2013.

SECOND QUARTER RESULTS

Operating earnings attributable to participating shareholders, a non-IFRS financial measure, for the quarter ended June 30, 2013 were $260 million or $0.56 per share, compared with $287 million or $0.62 per share in the corresponding period in 2012.

Subsidiaries contributed $289 million to Power Corporation's operating earnings, compared with $291 million in the same period in 2012. Results from corporate activities were a net charge of $16 million, compared with a contribution of $9 million in the corresponding period in 2012.

Other items, not included in operating earnings, represented a net charge of $14 million. Power Corporation's share of other items at Power Financial Corporation (Power Financial), a subsidiary, was a contribution of $7 million. Other items also included an impairment charge of $21 million on the Corporation's investment in CITIC Pacific. In the corresponding quarter of 2012, other items represented a charge of $10 million. Additional details on other items can be found in the sections entitled "Results of Power Financial" and "Earnings Summary" below.

Net earnings attributable to participating shareholders were $246 million or $0.53 per share, compared with $277 million or $0.60 per share in the corresponding period in 2012.

SIX-MONTH RESULTS

Operating earnings attributable to participating shareholders for the six months ended June 30, 2013 were $507 million or $1.10 per share, compared with $492 million or $1.07 per share in the corresponding period in 2012, an increase of 2.9% on a per share basis.

Other items, not included in operating earnings, resulted in a net charge of $36 million, compared with a contribution of $45 million in the corresponding period in 2012.

Net earnings attributable to participating shareholders were $471 million or $1.02 per share, compared with $537 million or $1.17 per share for the same period in 2012.

RESULTS OF POWER FINANCIAL

Power Financial reported operating earnings attributable to common shareholders for the quarter ended June 30, 2013 of $464 million or $0.65 per share, compared with $444 million or $0.63 per share in the corresponding period in 2012.

For the six months ended June 30, 2013, Power Financial reported operating earnings attributable to common shareholders of $871 million or $1.22 per share, compared with $815 million or $1.15 per share in the corresponding period in 2012.

Other items, not included in operating earnings, in the second quarter of 2013 resulted in a contribution of $11 million and were mainly composed of Power Financial's share of the gain recorded by Pargesa Holding SA in connection with its subsidiary Groupe Bruxelles Lambert's partial disposal of its interest in GDF Suez. For the quarter ended June 30, 2012, other items at Power Financial were a net charge of $15 million. Other items in the six-month period ended June 30, 2013 were 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 for the quarter ended June 30, 2013 were $475 million or $0.67 per share, compared with $429 million or $0.61 per share in the corresponding quarter of 2012.

For the six months ended June 30, 2013, 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.

At June 30, 2013, Power Corporation held a 65.8% economic interest in Power Financial. Power Financial's contribution to Power Corporation's operating earnings was $305 million for the quarter ended June 30, 2013, compared with $293 million in the same period in 2012. For the six months ended June 30, 2013, Power Financial contributed $573 million to Power Corporation's operating earnings, compared with $538 million for the same period in 2012.

DIVIDENDS ON NON-PARTICIPATING 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
1986 Series - POW.PR.F September 24, 2013 October 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 A - POW.PR.A September 24, 2013 October 15, 2013 35¢
Series B - POW.PR.B September 24, 2013 October 15, 2013 33.4375¢
Series C - POW.PR.C September 24, 2013 October 15, 2013 36.25¢
Series D - POW.PR.D September 24, 2013 October 15, 2013 31.25¢
Series G - POW.PR.G September 24, 2013 October 15, 2013 35¢

[1] In accordance with the articles of the Corporation

DIVIDENDS ON PARTICIPATING SHARES

The Board of Directors also declared a quarterly dividend of 29 cents per share on the Participating Preferred Shares and the Subordinate Voting Shares of the Corporation, payable September 30, 2013 to shareholders of record on September 9, 2013.

For purposes of the Income Tax Act (Canada) and any similar provincial legislation, all of the above dividends on the Corporation's preferred shares (including the Participating Preferred Shares) and Subordinate Voting Shares are eligible dividends.

ABOUT POWER CORPORATION

Power Corporation of Canada is a diversified international management and holding company with interests in companies in the financial services, communications and other business sectors in North America, Europe and Asia. To learn more, visit www.powercorporation.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 (2) 548   531   289   291  
Results from corporate activities                
  Income from investments 45   47   14   39  
  Operating and other expenses (60)   (61)   (30)   (30)  
Dividends on non-participating shares (26)   (25)   (13)   (13)  
Operating earnings attributable to participating shareholders 507   492   260   287  
Other items (see below) (36)   45   (14)   (10)  
Net earnings attributable to participating shareholders 471   537   246   277  
Earnings per share (attributable to participating shareholders)                
  - operating earnings 1.10   1.07   0.56   0.62  
  - non-operating earnings (0.08)   0.10   (0.03)   (0.02)  
  - net earnings 1.02   1.17   0.53   0.60  
 
OTHER ITEMS
(unaudited) Six months ended   Three months ended  
  June 30,
2013
  June 30,
2012
  June 30,
2013
  June 30,
2012
 
Power Corporation's share of Power Financial's other items:                
  IGM     (3)       (3)  
  Pargesa (2)   48   7   (7)  
  (2)   45   7   (10)  
Impairment charge on CITIC Pacific (21)       (21)      
Charges recorded by Square Victoria Communications Group (13)              
  (36)   45   (14)   (10)

(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) Includes Power Financial and other subsidiaries of the Corporation.

Non-IFRS Financial Measures

In analyzing the financial results of the Corporation and consistent with the presentation in previous years, net earnings attributable to participating shareholders are classified into the following components:

  • operating earnings attributable to participating 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 corporations and associates.

However, management uses these financial measures in its presentation and analysis of the financial performance of Power Corporation, and believes that they provide additional meaningful information to readers in their analysis of the results of the Corporation.

Operating earnings attributable to participating 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 Corporation of Canada

For further information:

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

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