May 13, 2008 / 4:15 PM / in 10 years

RPT-UPDATE 1-CI Financial profit dips with markets, EBITDA rises

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TORONTO, May 13 (Reuters) - CI Financial Income Fund CIX_u.TO reported a 2 percent drop in first-quarter profit on Tuesday as a result of declines in equity markets.

Canada’s third-largest mutual fund company posted earnings of C$139.4 million ($139.4 million), or 50 Canadian cents a unit, for the three months ended March 31. That compares with a profit of C$142.1 million, or 51 Canadian cents a unit, a year earlier.

Underlying profitability, measured by earnings before interest, taxes, depreciation and amortization (EBITDA), rose to C$181.5 million, or 65 Canadian cents a unit, from C$175.6 million, or 63 Canadian cents a unit.

“Despite significant declines in equity markets during the quarter, we are pleased that our earnings and cash flows remained healthy,” Stephen MacPhail, CI’s president, said in a release.

“In addition, we have experienced a significant rebound in assets under management since quarter-end. If positive market conditions continue, CI’s profitability should improve from first-quarter levels.”

Average retail assets under management slipped 3 percent to C$61.8 billion as of March 31, from C$63.7 billion a year earlier.

As of May 12, however, CI said, retail assets under management were C$66.6 billion, up 8 percent from the latest quarter-end, and the highest level in 10 months.

CI’s units were down 32 Canadian cents at C$23.18 on the Toronto Stock Exchange on Tuesday. The units are off about 16 percent this year, compared with an 11 percent slide for the shares of bigger competitor IGM Financial (IGM.TO) and a 21 percent fall at smaller rival AGF Management Ltd (AGFb.TO). ($1=$1.00 Canadian) (Reporting by John McCrank; editing by Rob Wilson)

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