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Power Corporation Reports First Quarter 2019 Financial Results and Dividend Increase

CNW Group - Tue May 14, 7:24AM CDT

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

Power Corporation of Canada (Power Corporation or the Corporation) (TSX:POW.TO) today reported earnings results for the three months ended March 31, 2019.

Consolidated Results of Power CorporationFor the period ended March 31


--  Power Corporation announced on April 17, 2019 the successful
        completion of its substantial issuer bid to repurchase for
        cancellation $1.35 billion of its subordinate voting shares.
        The Corporation also announced its participation in Power
        Financial Corporation's (Power Financial) substantial issuer
        bid to repurchase for cancellation $1.65 billion of its common
        shares. Power Corporation's proceeds from its participation in
        the Power Financial substantial issuer bid were $1.4 billion.
        As a result, the Corporation's direct interest in Power
        Financial decreased to 64.1% (65.5% at March 31, 2019).
    --  The Board of Directors today declared a 6% increase in the
        quarterly dividend from 38.20 cents to 40.50 cents per share on
        the Corporation's participating shares.

First Quarter Net earnings attributable to participating shareholders were $292 million or $0.63 per share, compared with $525 million or $1.13 per share in 2018.

Contributions from Power Financial, the Sagard Investment Funds, China Asset Management Co., Ltd. (China AMC) and Other Investments, and from Corporate and Other subsidiaries to the Corporation's net earnings were:

(in millions of dollars)

                                                     2019  2018

     · Power Financial                               350   383

      · Sagard Investment Funds, China AMC and Other
       investments                                     11   227

     · Corporate and Other subsidiaries             (69) (85)

                                                      292   525

Power Financial CorporationFor the period ended March 31

First Quarter Net earnings attributable to common shareholders were $536 million or $0.75 per share, compared with $586 million or $0.82 per share in 2018.

On May 13, 2019, Power Financial declared a quarterly dividend of $0.4555 per common share, compared with $0.4330 in the corresponding quarter in 2018.

Sagard Investment Funds, China AMC and Other InvestmentsFor the period ended March 31

First Quarter Income from the Sagard Investment Funds, China AMC and Other Investments was $11 million, compared with $227 million in 2018. Investment income was higher in the first quarter of 2018 as a result of distributions on the sale of investments in Sagard Europe.

Dividends on Power Corporation Participating Shares

The Board of Directors today declared a 6% increase in the quarterly dividend from 38.20 cents to 40.50 cents per share on the Participating Preferred Shares and the Subordinate Voting Shares of the Corporation, payable June 28, 2019 to shareholders of record June 7, 2019.

Dividends on Power Corporation Non-Participating Preferred Shares

The Board of Directors also declared quarterly dividends on the Corporation's preferred shares, payable July 15, 2019 to shareholders of record June 25, 2019:

Series            Stock Symbol                Amount            Series            Stock Symbol          Amount


     POW.PR.F                Floating rate [1]
     Series C

        Series A
     Series D

        Series B
     Series G

[1] Equal to one quarter
                of 70% of the average
                prime rate of two major
                Canadian chartered banks
                for the period March 1 to
                May 31, 2019.

About Power Corporation

Power Corporation of Canada is a diversified international management and holding company with interests in companies in the financial services, asset management, sustainable and renewable energy, and other business sectors in North America, Europe and Asia. To learn more, visit

At March 31, 2019, Power Corporation held the following economic interests:

--  65.5% - Power Financial (TSX:PWF.TO) ([1])
    --  100% - Sagard SAS (Europe) ([2)(])
    --  100% - Sagard Holdings
    --  100% - Sagard China
    --  100% - Power Energy Corporation
    --  27.8% - China AMC ([3])
[1]               On April 17, 2019, following the
                                  Corporation's participation in
                                  Power Financial's substantial
                                  issuer bid, Power Corporation's
                                  interest in Power Financial
                                  decreased to approximately 64.1%.

               [2]               The Corporation holds an equity
                                  interest of 22.0% in Sagard II and
                                  37.3% in Sagard 3, funds managed
                                  by Sagard SAS.

               [3]               IGM Financial Inc. (IGM) and the
                                  Corporation each hold a 13.9%
                                  interest in China AMC.
Earnings Summary

       (unaudited)                                       Three months ended

        (in millions of Canadian
         dollars, except per share
              March 31,


                                                           2019            2018

                     Adjusted net earnings

       Power Financial [1]                                 350             383

        Other subsidiaries [2]                             (20)           (32)


                                                            330             351

        Corporate operations

        Income - Sagard Investment
         Funds, China AMC and Other
         Investments [3]                                     11             227

        Operating and other expenses                       (36)           (40)

        Dividends on non-
         participating shares                              (13)           (13)


                     Adjusted net earnings [4]              292             525

       Other items



                     Net earnings [4]                       292             525


                     Earnings per share - Basic [4]

                     Adjusted net earnings                 0.63            1.13

       Other items



                     Net earnings                          0.63            1.13

[1]               Contributions from IGM and Pargesa
                                  Holding SA reflect adjustments in
                                  accordance with IAS 39.

               [2]               Comprised of operating results of: Power
                                  Energy Corporation, Square Victoria
                                  Communications Group Inc. (up to the
                                  date of disposal in July 2018), and
                                  IntegraMed America, Inc. (IntegraMed).

               [3]               Excludes earnings (losses) from

               [4]               Attributable to participating
Income - Sagard Investment Funds, China AMC and Other

        (unaudited)                           Three months

        (in millions of
         Canadian dollars)                    March 31,


                                      2019       2018

        Sagard Investment
         Funds [1]

        Sagard Europe [2]              (3)       168

        Sagard Holdings
         [3][4]                        (6)         7

        Sagard China                    14         31

       China AMC                        7          8

        Other Investments

        Investment and hedge
         funds, and other [5]          (1)        13


                                        11        227
[1]               Income from investments for the Sagard
                                  Investment Funds is presented net of
                                  expenses of their separate dedicated

               [2]               Mainly comprised gains distributed by
                                  the funds in the first quarter of 2018
                                  on the sale of investments.

               [3]               Excludes the Corporation's share of the
                                  operating results of IntegraMed
                                  presented in "Other subsidiaries".

               [4]               Includes share of earnings (loss) from
                                  investments in a jointly controlled
                                  corporation and associates.

               [5]               Consists mainly of foreign exchange
                                  gains or losses and interest on cash
                                  and cash equivalents.
Sagard Investment Funds

        (unaudited)                          March 31, 2019
     December 31, 2018

        (in millions of


                                                     Sagard              Sagard  Sagard   Total
                                                     Europe            Holdings   China                 Europe       Holdings         China

       Cost                                            281                  366      607    1,254             280             342            515         1,137

        Unrealized gain
         (loss)                                          96                    5      132      233             111              14            (5)          120


        Fair value of

         investments                                    377                  371      739    1,487             391             356            510         1,257

       Cash                                              −                 150       85      235
             −            185            162           347

        Fair value of a
              and other                                   −                  38      (4)      34
             −             38            (3)           35


        Total fair value                                377                  559      820    1,756             391             579            669         1,639


Non-IFRS Financial Measures and Presentation

Net earnings attributable to participating shareholders are comprised of:

--  Adjusted net earnings attributable to participating
        shareholders; and
    --  Other items, which include the after-tax impact of any item
        that in management's judgment would make the period-over-period
        comparison of results from operations less meaningful. Other
        items include the Corporation's share of items presented as
        Other items by a subsidiary or a jointly controlled

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. Adjusted net earnings, as defined by the Corporation, assist the reader in comparing the current period's results to those of previous periods as items that are not considered to be part of ongoing activities are excluded from this non-IFRS measure.

Adjusted net earnings attributable to participating shareholders and adjusted net 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. Refer to the "Non-IFRS Financial Measures and Presentation" section of the Corporation's most recent Management's Discussion and Analysis for the definition of non-IFRS financial measures and their reconciliation with IFRS financial measures.

The Corporation also uses a non-consolidated basis of presentation to present and analyze its results whereby the Corporation's interests in Power Financial and other subsidiaries are accounted for using the equity method. Presentation on a non-consolidated basis is a non-IFRS presentation. However, it is useful to the reader as it presents the holding company's (parent) results separately from the results of its operating subsidiaries.

Eligible Dividends

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.

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, including the fintech strategy, as well as the outlook for North American and international economies for the current fiscal year and subsequent. 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, fluctuations in interest rates, inflation and foreign exchange rates, monetary policies, business investment and the health of local and global equity and capital markets, management of market liquidity and funding risks, risks related to investments in private companies and illiquid securities, risks associated with financial instruments, changes in accounting policies and methods used to report financial condition (including uncertainties associated with significant judgments, estimates and assumptions), the effect of applying future accounting changes, business competition, operational and reputational risks, technological changes, cybersecurity risks, 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

SOURCE Power Corporation of Canada

View original content:

SOURCE: Power Corporation of Canada

Stephane Lemay, Vice-President, General Counsel and Secretary, 514-286-7400

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