TORONTO, Nov. 7, 2017 /CNW/ - E-L Financial Corporation
Limited ("E-L Financial") (TSX: ELF) (TSX: ELF.PR.F) (TSX:
ELF.PR.G) (TSX: ELF.PR.H) today reported for the quarter ended
September 30, 2017, consolidated shareholders' net income of
$49.4 million or $11.60 per share compared with $191.3 million or $47.72 per share in 2016. For the nine months
ended September 30, 2017, E-L Financial earned consolidated
shareholders' net income of $411.0
million or $101.70 per share
compared with $233.1 million or
$56.38 per share in 2016.
E-L Financial's net equity value per Common Share was
$1,242.85 at September 30, 2017,
an increase of 7.2% from $1,159.26 as
at December 31, 2016.
E-L Corporate
For the quarter ended September
30, E-L Corporate earned net income of $10.6 million in 2017 compared to $153.5 million in 2016. The decrease in net
income is primarily due to E-L Corporate's net fair value losses on
the global investment portfolio of $25.0
million compared to a net gain of $177.4 million in 2016. E-L Corporate's global
investment portfolio for the third quarter of 2017 yielded a
pre-tax total return of nil compared to 4% in the prior period. The
nil return for the third quarter of 2017 is primarily attributable
to the impact of the strengthening of the Canadian dollar on the
global investment portfolio which offset total investment
returns.
For the nine months ended September
30, E-L Corporate earned net income of $289.3 million in 2017 compared to $133.8 million in 2016. The increase in net
income is due to E-L Corporate's net gain on investments of
$287.1 million compared to
$89.9 million in 2016. E-L
Corporate's global investment portfolio was positively impacted by
the performance of foreign equity markets with a year to date total
return on the global investment portfolio of 8% compared to 3% in
the prior year.
Empire Life
The Empire Life Insurance Company ("Empire Life") reported net
income attributable to E-L Financial of $38.8 million in the third quarter of 2017
compared to $37.8 million for the
comparable period in 2016. The increase in earnings for the third
quarter of 2017 compared to 2016 is primarily as a result of
improved operating results in the Employee Benefits product
line and lower hedge costs, partially offset by lower gains in the
Individual Insurance product line.
For the nine months ended September 30, 2017, Empire Life's
net income attributable to E-L Financial was $121.7 million compared to $99.3 million for the comparable period in 2016.
The increase in net income was primarily due to the above mentioned
items and improved operating results in the Wealth Management
product line.
Empire Life's assets under management (including segregated fund
and mutual fund assets) increased 6% over September 30, 2016
levels to reach $16.8 billion.
Empire Life's Minimum Continuing Capital and Surplus
Requirements ratio increased to 274.2% at September 30, 2017
compared to 248.3% at December 31, 2016. Growth in retained
earnings and a $200 million debenture
issue on September 15, 2017
strengthened the ratio for 2017.
CONSOLIDATED SUMMARY OF NET INCOME (UNAUDITED)
|
E-L Financial
Consolidated
|
Third
quarter
|
|
Year to
date
|
|
(millions of
dollars)
|
2017
|
2016
|
|
2017
|
2016
|
|
Contribution to net
income
|
|
|
|
|
|
|
E-L
Corporate1
|
$
|
10.6
|
$
|
153.5
|
|
$
|
289.3
|
$
|
133.8
|
|
Empire
Life2
|
38.8
|
37.8
|
|
121.7
|
99.3
|
|
Net income
|
$
|
49.4
|
$
|
191.3
|
|
$
|
411.0
|
$
|
233.1
|
|
E-L
Corporate
|
Third
quarter
|
|
Year to
date
|
|
(millions of
dollars)
|
2017
|
2016
|
|
2017
|
2016
|
|
Revenue
|
|
|
|
|
|
|
Net (loss) gain on
investments3
|
$
|
(25.0)
|
$
|
177.4
|
|
$
|
287.1
|
$
|
89.9
|
|
Investment and other
income
|
25.4
|
22.1
|
|
91.5
|
84.6
|
|
Share of associates
income
|
9.4
|
16.9
|
|
22.3
|
19.2
|
|
9.8
|
216.4
|
|
400.9
|
193.7
|
|
Expenses
|
|
|
|
|
|
|
Operating
|
6.4
|
6.0
|
|
20.0
|
18.1
|
|
Income
taxes
|
1.2
|
28.3
|
|
54.7
|
23.9
|
|
Non-controlling
interests
|
(8.4)
|
28.6
|
|
36.9
|
17.9
|
|
(0.8)
|
62.9
|
|
111.6
|
59.9
|
|
Net
income
|
$
|
10.6
|
$
|
153.5
|
|
$
|
289.3
|
$
|
133.8
|
|
Empire
Life
|
Third
quarter
|
|
Year to
date
|
|
(millions of
dollars)
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
Net
premiums
|
$
|
217.4
|
$
|
218.7
|
|
$
|
624.2
|
$
|
659.0
|
|
Net (loss) gain on
investments3
|
(214.9)
|
115.1
|
|
32.9
|
418.1
|
|
Investment and other
income
|
69.8
|
60.0
|
|
204.0
|
186.2
|
|
Fee income
|
62.2
|
59.1
|
|
186.7
|
170.1
|
|
134.5
|
452.9
|
|
1,047.8
|
1,433.4
|
|
Expenses
|
|
|
|
|
|
|
Benefits and
expenses
|
78.0
|
392.2
|
|
875.6
|
1,280.8
|
|
Income and other
taxes
|
17.0
|
18.4
|
|
50.0
|
47.3
|
|
Non-controlling and
participating policyholders' interests
|
0.7
|
4.5
|
|
0.5
|
6.0
|
|
95.7
|
415.1
|
|
926.1
|
1,334.1
|
|
Net
income
|
$
|
38.8
|
$
|
37.8
|
|
$
|
121.7
|
$
|
99.3
|
|
|
1 Net of
non-controlling interests
|
|
2 Net of
non-controlling interests and participating policyholders' income
(loss)
|
|
3 Includes
fair value change on FVTPL investments and realized gains on AFS
investments
|
Non-GAAP Measures
The Company uses non-GAAP measures including net equity value
per Common Share to provide investors with supplemental measures of
its operating performance that may not otherwise be apparent when
relying solely on International Financial Reporting Standards
("IFRS") financial measures. Net equity value per Common Share
provides an indication of the accumulated shareholder value,
adjusting shareholders' equity to reflect investments in associates
at fair value, net of tax, as opposed to their carrying value.
The Company also uses assets under management to provide
investors with a supplemental measure of Empire Life's performance
and to highlight trends in its core business that may not otherwise
be apparent when relying solely on IFRS financial measures. The
Company also believes that securities analysts, investors and other
interested parties frequently use non-GAAP measures in the
evaluation of issuers.
About E-L Financial
E-L Financial operates as an investment and insurance holding
company. In managing its operations, E-L Financial distinguishes
between two operating segments, E-L Corporate and Empire Life.
E-L Corporate represents investments in stocks and fixed income
securities held directly and indirectly through pooled funds,
closed-end investment companies and other investment companies. The
investment strategy is to accumulate shareholder value through
long-term capital appreciation and dividend income from its
investments.
Empire Life is a subsidiary of E-L Financial. Since 1923, Empire
Life has provided competitive individual and group life and health
insurance, investment and retirement products to Canadians. Empire
Life's mission is to make it simple, fast and easy for Canadians to
get the investment, insurance and group benefits coverage they need
to build wealth, generate income, and achieve financial
security.
SOURCE E-L Financial Corporation Limited