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Power Financial Corporation (TSX: PWF) today reported earnings results for the three and six months ended June 30, 2019.

Power Financial
Consolidated results for the period ended June 30

Highlights

  • On April 17, 2019, Power Financial successfully completed its substantial issuer bid to repurchase for cancellation $1.65 billion of its common shares representing 7% of its issued and outstanding shares.
  • Sales at Great-West Lifeco Inc. (Lifeco) for the second quarter of 2019 were $34.3 billion, up 4% from the second quarter of 2018, primarily driven by higher sales in Europe.
  • On June 1, 2019, Great-West Life & Annuity (GWL&A) completed the sale of substantially all of its individual life insurance and annuity business to Protective Life Insurance Company. The transaction, valued at $1.6 billion, frees up capital and allows Lifeco to focus on the defined contribution retirement and asset management markets in the U.S. segment.
  • IGM Financial Inc. (IGM) reported record quarter-end assets under management at June 30, 2019 of $162.3 billion, an increase of 1.2% in the quarter and 2.0% from the prior year driven by favourable investment returns.
  • Groupe Bruxelles Lambert (GBL) finalized in March and April 2019 its exit from the energy sector by selling its remaining interest in Total SA through forward sales maturing in January 2020. In the quarter, GBL also sold a 0.7% interest in adidas AG (adidas).
  • On July 9, 2019, GBL announced that it had entered into exclusive negotiations to acquire a majority stake in the Webhelp group, one of the world’s leading providers of customer experience and business process outsourcing.

Second Quarter 
Net earnings attributable to common shareholders were $443 million or $0.66 per share, compared with $658 million or $0.92 per share in 2018.

Adjusted net earnings attributable to common shareholders (a non-IFRS financial measure) were $589 million or $0.88per share, compared with $658 million or $0.92 per share in 2018.

Other items in 2019, not included in adjusted net earnings, were a net charge of $146 million consisting of the Corporation’s share of Lifeco’s net charge on the sale of GWL&A’s individual life insurance and annuity business in the U.S. and the Corporation’s share of Imerys’ restructuring and other charges.

The Corporation participated Lifeco’s substantial issuer bid to repurchase for cancellation $2.0 billion of its common shares. Power Financial’s proceeds from its participation in the Lifeco substantial issuer bid were $1.65 billion. As a result, the Corporation’s direct interest in Lifeco decreased to 66.8% (67.8% at March 31, 2019).

Contributions to Power Financial’s net earnings and adjusted net earnings were:

(in millions of dollars)

2019

2018

Net Earnings

Adjusted Net 
Earnings

Net Earnings 
and 
Adjusted Net Earnings

Lifeco

306

440

562

IGM

110

115

121

Pargesa Holding SA (Pargesa)

86

93

36

Power Financial Corporate and Other

(59)

(59)

(61)

443

589

658

Six Months 
Net earnings attributable to common shareholders were $979 million or $1.41 per share, compared with $1,244 million or $1.74 per share in 2018.

Adjusted net earnings attributable to common shareholders were $1,125 million or $1.62 per share, compared with $1,244 million or $1.74 per share in 2018.

Other items in the six-month period ended June 30, 2019 were as described above.

Contributions to Power Financial’s net earnings and adjusted net earnings were:

(in millions of dollars)

2019

2018

Net Earnings

Adjusted Net 
Earnings

Net Earnings 
and 
Adjusted Net Earnings

Lifeco

750

884

1,057

IGM

220

225

228

Pargesa

132

139

80

Power Financial Corporate and Other

(123)

(123)

(121)

979

1,125

1,244

Great-West Lifeco, IGM Financial and Pargesa 
Results for the period ended June 30

GREAT-WEST LIFECO INC.

Second Quarter 
Net earnings attributable to common shareholders were $459 million or $0.49 per share and adjusted net earnings were $658 million or $0.70 per share, compared with net earnings and adjusted net earnings of $831 million or $0.84per share in 2018.

Lifeco’s net earnings for the second quarter of 2019 included a net charge of $199 million relating to the sale, via indemnity reinsurance, of the U.S. individual life insurance and annuity business, which reduced earnings per common share by $0.21.

Six Months 
Net earnings attributable to common shareholders were $1,116 million or $1.16 per share and adjusted net earnings were $1,315 million or $1.37 per share, compared with net earnings and adjusted net earnings of $1,562 million or $1.58 per share in 2018.

IGM FINANCIAL INC.

Second Quarter 
Net earnings available to common shareholders were $185 million or $0.77 per share and adjusted net earnings were $193 million or $0.81 per share, compared with net earnings and adjusted net earnings of $203 million or $0.85 per share in 2018. Other items, not included in net earnings, of $8 million in the second quarter consisted of IGM’s share of Lifeco’s other items.

Six Months 
Net earnings available to common shareholders were $353 million or $1.47 per share and adjusted net earnings were $361 million or $1.50 per share, compared with net earnings and adjusted net earnings of $389 million or $1.61 per share in 2018.

PARGESA HOLDING SA

Second Quarter 
Pargesa reported net earnings of SF134 million, compared with SF152 million in 2018. See contribution to Power Financial’s earnings in the tables below.

Six Months 
Pargesa reported net earnings of SF225 million, compared with SF213 million in 2018.

Dividends on Power Financial Common Shares

The Board of Directors today declared a quarterly dividend of 45.55 cents on the Corporation’s common shares, payable November 1, 2019 to shareholders of record September 30, 2019.

Dividends on Power Financial Preferred Shares

The Board of Directors also declared quarterly dividends on the Corporation’s preferred shares.

Dividends payable November 15, 2019 to shareholders of record October 25, 2019:

Series – Stock Symbol

Amount

Series A – PWF.PR.A

Floating rate [1]

[1] Equal to one quarter of 70% of the average prime rate of two major Canadian chartered banks for the period July 1 to September 30, 2019.

Dividends payable October 31, 2019 to shareholders of record October 10, 2019:

Series

Stock Symbol

Amount

Series

Stock Symbol

Amount

Series D

PWF.PR.E

34.375¢

Series O

PWF.PR.O

36.25¢

Series E

PWF.PR.F

32.8125¢

Series P

PWF.PR.P

14.4125¢

Series F

PWF.PR.G

36.875¢

Series Q

PWF.PR.Q

20.5425¢

Series H

PWF.PR.H

35.9375¢

Series R

PWF.PR.R

34.375¢

Series I

PWF.PR.I

37.50¢

Series S

PWF.PR.S

30¢

Series K

PWF.PR.K

30.9375¢

Series T

PWF.PR.T

26.3438¢

Series L

PWF.PR.L

31.875¢

Series V

PWF.PR.Z

32.1875¢

 

SOURCE Power Financial Corporation