Power Corp. of Canada chairman Paul Desmarais Jr. gestures before the company's annual general meeting in Montreal May 15.CHRISTINNE MUSCHI/Reuters
The co-leaders of investment conglomerate Power Corp. of Canada say they're worried about the economic turmoil in Europe, but believe their holdings are well-insulated from any major impact.
"There's no question that there are many things to come and I think we all worry about that," chairman Paul Desmarais Jr. said after the holding company's annual meeting Tuesday.
But he added that Power has little exposure in Greece, Italy, Spain or Ireland, the euro zone countries that are most vulnerable.
And a drop in the value of the euro could actually help increase Power's profits when translated into the U.S. or Canadian dollar.
Although its European holdings are headquartered in France, the diversified nature of its global investments offer a natural hedge because they operate around the world including in developing countries, Mr. Desmarais said.
Outside the annual meeting, police blocked the entrances as a few dozen protesters denounced the company and the Desmarais family.
The demonstration was one of several Tuesday in the province, where about one-third of post-secondary students are boycotting classes in a protest against tuition hikes that has lasted more than three months.
Protesters outside the meeting – some of whom were masked in balaclavas – banged drums and accused the company of greed.
Mr. Desmarais said the comments were unfortunate because the family cares a lot about society and is very dedicated to helping people in need.
"We're a very caring company and I think a very caring family and we care about the society around us and we've always demonstrated that," he told reporters.
The holding company reported earlier Tuesday first-quarter net earnings attributable to shareholders grew 15 per cent to $264-million, or 57 cents per share, up from $216-million, or 47 cents per share, during the quarter a year ago.
Revenue totalled $7.2-billion, up slightly from $7.03-billion.
Subsidiaries contributed $244-million to operating earnings, down 1.6 per cent from $248-million in the quarter a year earlier.
Corporate activities resulted in a net charge of $23-million, up slightly from a net charge of $20-million in the 2011 period.
The company also benefited from $30-million in gains realized by Groupe Bruxelles Lambert on the partial sale of wine and spirits producer Pernod Ricard and $28-million from the disposal of French chemicals producer Arkema.
Its main subsidiary, Power Financial Corp. , whose primary business is insurance and mutual funds, reported Monday that its profits increased 23 per cent to $455-million during the first quarter on gains from the disposal of those two European assets.
Power Financial's profit attributable to common shareholders amounted to 64 cents per share for the period ended March 31, up from 52 cents per share in the prior year.
Power Corp. of Canada is a diversified management and holding company that holds interests, directly or indirectly, in companies that are active in the financial services, communications and other business sectors.