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Jeffrey Orr, president and chief executive officer of Power Financial Corp. (Fernando Morales/The Globe and Mail)
Jeffrey Orr, president and chief executive officer of Power Financial Corp. (Fernando Morales/The Globe and Mail)

Power Financial profit rises despite drop in revenue Add to ...

Power Financial Corp. improved its profits in the third quarter as lower charges on its books helped boost the bottom line despite a $600-million drop in revenue.

Power Financial, owner of some of Canada’s largest financial services companies, said Friday that third-quarter net earnings attributable to shareholders were $312-million, or 44 cents a diluted share, in the quarter ended Sept. 30.

That compared with a profit of $294-million, or 41 cents a share, last year.

Revenue dropped to $9.1-billion from $9.7-billion.

In the latest quarter, Power Financial took $28-million less in charges on its books – $116-million compared with $144-million a year earlier.

In addition, operating units Great-West Lifeco Inc. and Power’s Pargesa investment company in Europe produced lower earnings.

For Power Financial, operating profit was $454-million, or 60 cents per share, compared with $465-million, or 62 cents, in the third quarter of 2010.

On a segmented basis, the contribution of subsidiary Great-West to Power’s operating earnings dropped to $312-million from $323-million.

The contribution by mutual fund giant IGM Financial Inc. – which owns Investors Group and Mackenzie Financial – was $121-million compared with $104-million.

Meanwhile, Pargesa, which reports its results in Swiss francs but has European investments, contributed $36-million, down from $59-million. That reflected the weakening of the euro against the Swiss franc.

Power Financial is part of the Power Corp. of Canada group of companies controlled by the Montreal-based Desmarais family.

The holding company earned $190-million, or 41 cents per share, compared to $169-million, or 37 cents, a year earlier.

Total revenue fell 5.8 per cent to $9.2-billion, including $4.4-billion from net premiums. The decrease was attributable to a 9.8 per cent drop to $1.36-billion in regular net investment income.

Operating earnings increased nearly 28 per cent to $348-million from $275-million in the year-ago period.

 
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