August 6, 2010 / 4:17 PM / 8 years ago

UPDATE 1-Power Financial profit slips in second quarter

* Profit up at units Great West, IGM, down at Pargesa

TORONTO, Aug 6 (Reuters) - Power Financial Corp (PWF.TO), a unit of Montreal’s family-controlled Power Corp of Canada (POW.TO), said on Friday its net and operating profits slipped in the second quarter but were up year-to-date due to strong performances from its subsidiaries.

Power Financial, which controls insurance company Great West Lifeco (GWO.TO) and mutual fund company IGM Financial (IGM.TO), said net profit fell 5 percent to C$429 million ($417 million), or 57 Canadian cents a share, in the quarter, from C$452 million, or 61 Canadian cents a share, in the same quarter last year.

The results were approximately in line with the share view of analysts, who forecast earnings of 59 Canadian cents a share.

Power Financial said that for the year to date, net earnings were C$818 million, or C$1.09 a share, compared with C$647 million, or 86 Canadian cents a share, in the same period in 2009.

Operating earnings, which reflect profits from continuing operations and give a better indication of underlying business strength, were C$433 million, or 58 Canadian cents a share, compared with C$442 million, or 60 Canadian cents a share, in the year-before quarter.

“The increase in operating earnings reflects primarily the increase in the contribution from the corporation’s subsidiaries,” the company said in a statement.

Stock in Power Financial rose 0.85 percent on the Toronto Stock Exchange to C$28.54 late on Friday morning.


At Great-West Lifeco, Canada’s No. 2 life insurer, second quarter profit attributable to common shareholders was C$433 million, compared with C$413 million in the same period in 2009.

At IGM, Canada’s No. 2 mutual fund company, profit available to common shareholders jumped 24 percent to C$179 million, compared with C$145 million in 2009.

The contribution from 50 percent-owned Parjointco NV, which in turn holds a 54.1 percent interest in Swiss-based Pargesa Holding SA (PARG.S), slipped.

Pargesa, which holds significant positions in European companies operating in areas ranging from cement and building materials to specialty minerals, oil and gas, electricity, water and waste management and wines and spirits, contributed the equivalent of C$57 million in operating earnings, compared with C$88 million in the year-before quarter. ($1=$1.03 Canadian) (Reporting by Pav Jordan; editing by Peter Galloway)

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