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Power Corp of Canada
Symbol C : POW
Shares Issued 417,016,995
Close 2018-11-08 C$ 27.33
Recent Sedar Documents

Power Corp. earns $186-million in Q3 2018

2018-11-08 15:26 ET - News Release

An anonymous director reports

POWER CORPORATION REPORTS THIRD QUARTER FINANCIAL RESULTS

Power Corp. of Canada has released its earnings results for the three and nine months ended Sept. 30, 2018.

Consolidated results of Power Corp. for the period ended Sept. 30, 2018

Highlights:

  • The corporation completed the disposal of assets of La Presse Ltee. to a not-for-profit organization.
  • Early redemption of 7.57 per cent debentures due April 22, 2019, refinanced with 4.455 per cent debentures due in 2048, reducing annual financing expenses by $8-million.

Third quarter

Net earnings attributable to participating shareholders were $186-million, or 40 cents per share, compared with $470-million, or $1.02 per share, in the comparable period of 2017. Power Financial Corp.'s contribution to earnings was $72-million higher than the corresponding period. However, net earnings were adversely impacted by lower income from investments and the loss resulting from the La Presse transaction. The comparable period of the prior year included a gain of $174-million on the corporation's investment in China Asset Management Co. Ltd. (China AMC).

Adjusted net earnings attributable to participating shareholders (a non-IFRS (international financial reporting standards) financial measure) were $283-million, or 61 cents per share, compared with $471-million, or $1.02 per share, in the comparable period of 2017.

Other items, not included in adjusted net earnings, resulted in a charge of $97-million in the third quarter of 2018, consisting of:

  • The corporation's share of Great-West Lifeco's (Lifeco) restructuring charges related to the integration of Retirement Advantage, a United Kingdom financial services provider, as well as the pending sale of a heritage block of policies;
  • The corporation's share of IGM Financial Inc.'s restructuring and other charges resulting from the re-engineering of North American equity offerings as well as a premium on the early redemption of IGM's debentures;
  • The loss realized by Power Corp. as a result of the disposal of assets of La Presse and the premium paid on the early redemption of its debentures.

Contributions to Power Corp.'s net earnings and adjusted net earnings are provided in the attached table.

                         CONTRIBUTIONS TO NET EARNINGS AND ADJUSTED NET EARNINGS
                                             (in millions)                 
                                                                                        
                                                2018 net      2018 adjusted      2017 net      2017 adjusted 
                                                earnings       net earnings      earnings       net earnings

Power Financial                                    $ 341              $ 377         $ 304              $ 305
Sagard investment funds, China AMC and
other investments                                    (28)               (28)          219                219
Corporate and other subsidiaries                    (127)               (66)          (53)               (53)
Total                                                186                283           470                 47

Nine months

Net earnings attributable to participating shareholders were $1,058-million, or $2.28 per share, compared with $1,078-million, or $2.33 per share, in the same period of 2017.

Adjusted net earnings attributable to participating shareholders were $1,155-million, or $2.49 per share, compared with $1,141-million, or $2.46 per share, in the same period of 2017.

Contributions to Power Corp.'s net earnings and adjusted net earnings are provided in the attached table.

                         CONTRIBUTIONS TO NET EARNINGS AND ADJUSTED NET EARNINGS
                                             (in millions)                 
                                                                                        
                                                2018 net      2018 adjusted      2017 net      2017 adjusted 
                                                earnings       net earnings      earnings       net earnings

Power Financial                                   $1,157             $1,193        $  978             $1,041
Sagard investment funds, China AMC and 
other investments                                    184                184           306                306
Corporate and other subsidiaries                    (283)              (222)         (206)              (206)
Total                                              1,058              1,155         1,078              1,141

Power Financial for the period ended Sept. 30, 2018

Third quarter

Net earnings attributable to common shareholders were $523-million, or 74 cents per share, compared with $463-million, or 65 cents per share, in the same period of 2017.

Adjusted net earnings attributable to common shareholders were $578-million, or 81 cents per share, compared with $465-million, or 65 cents per share, in the same period of 2017.

Other items, not included in adjusted net earnings, resulted in a charge of $55-million and consisted of Power Financial's share of Lifeco and IGM's other items, as indicated above.

Nine months

Net earnings attributable to common shareholders were $1,767-million, or $2.48 per share, compared with $1,492-million, or $2.09 per share, in the same period of 2017.

Adjusted net earnings attributable to common shareholders were $1,822-million, or $2.55 per share, compared with $1,588-million, or $2.22 per share, in the same period of 2017.

Sagard investment funds, China AMC and other investments for the period ended Sept. 30, 2018

Third quarter

Loss from investments was $28-million, compared with income of $219-million in the same period of 2017. Third quarter income from investments in 2018 includes a loss from Sagard China related to Chinese equity market declines. Income from investments in the third quarter of 2017 included a gain of $174-million on China AMC.

Nine months

Income from investments was $184-million, compared with $306-million in the same period of 2017. Income from investments in the nine-month period ended Sept. 30, 2018, also included gains on the disposal by Sagard Europe of two investments in the first quarter of 2018. Income from investments in the same period of 2017 also included a gain on the disposal of the corporation's interest in an investment fund in the second quarter of 2017.

Dividends on Power Corp. participating shares

The board of directors today declared a quarterly dividend of 38.20 cents per share on the participating preferred shares and the subordinate voting shares of the corporation, payable on Dec. 31, 2018, to shareholders of record on Dec. 10, 2018.

Dividends on Power Corp. non-participating preferred shares

The board of directors also declared quarterly dividends on the corporation's preferred shares, payable on Jan. 15, 2019, to shareholders of record on Dec. 24, 2018.

Series        Stock symbol              Amount  
 
1986 series       POW.PR.F       Floating rate      
Series A          POW.PR.A            35 cents     
Series B          POW.PR.B       33.4375 cents      
Series C          POW.PR.C         36.25 cents
Series D          POW.PR.D         31.25 cents
Series G          POW.PR.G            35 cents

About Power Corp. of Canada

Power Corp. 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.

                                            EARNINGS SUMMARY     
                                 (in millions, except per-share amounts)

                                               Three months ended Sept. 30,    Nine months ended Sept. 30,
                                                            2018      2017                 2018      2017
Adjusted net earnings                                                                               
Power Financial                                           $  377    $  305               $1,193    $1,041
Other subsidiaries                                           (17)      (10)                 (72)      (65)
Total                                                        360       295                1,121       976
Corporate operations                                                                                
Income (loss) -- Sagard investment funds, 
China AMC and other investments                              (28)      219                  184       306
Operating and other expenses                                 (36)      (30)                (111)     (102)
Dividends on non-participating shares                        (13)      (13)                 (39)      (39)
Adjusted net earnings                                        283       471                1,155     1,141
Other items                                                  (97)       (1)                 (97)      (63)
Net earnings                                                 186       470                1,058     1,078
Earnings per share -- basic                                                                       
Adjusted net earnings                                       0.61      1.02                 2.49      2.46
Other items                                                (0.21)        -                (0.21)    (0.13)
Net earnings                                                0.40      1.02                 2.28      2.33

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