Partners Value Investments Inc. Announces 2018 Semi-Annual Results
August 22 2018 - 5:00PM
Partners Value Investments Inc. (the “Company”) (TSXV:PVF.WT)
announced today its financial results for the three months ended
June 30, 2018. All amounts are stated in US dollars.
The Company generated net income of $63 million
for the three months ended June 30, 2018 compared to net loss of
$75 million in the prior year period. The increase in income is
mainly driven by the foreign currency gains incurred resulting from
an appreciating US dollar, as well as recognition of valuation
gains on the change in value of the warrant liability, as opposed
to foreign exchange and valuation losses incurred in the prior year
period.
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Consolidated Statements of Operations |
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For the periods ended June 30, 2018(Thousands, US
dollars) |
Three months ended |
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Six months ended |
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2018 |
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2017 |
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2018 |
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2017 |
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Investment income |
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Dividends |
$ |
18,934 |
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|
$ |
28,797 |
|
|
$ |
37,678 |
|
|
$ |
47,013 |
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Other
investment income |
|
1,995 |
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|
|
119 |
|
|
|
2,759 |
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|
1,513 |
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20,929 |
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28,916 |
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40,437 |
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48,526 |
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Expenses |
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Operating
expenses |
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(1,808 |
) |
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(1,642 |
) |
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(3,059 |
) |
|
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(2,760 |
) |
Financing
costs |
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(478 |
) |
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(1,007 |
) |
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(1,688 |
) |
|
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(1,788 |
) |
Retractable preferred share dividends |
|
(6,704 |
) |
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(6,271 |
) |
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(13,493 |
) |
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(12,629 |
) |
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11,939 |
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19,996 |
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22,197 |
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31,349 |
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Other items |
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Investment valuation gains through FVTPL1 |
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31,821 |
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2,552 |
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20,178 |
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15,134 |
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Warrant
liability valuation gains (losses) 2 |
|
5,039 |
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(81,715 |
) |
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56,349 |
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(96,161 |
) |
Amortization of deferred financing costs |
|
(566 |
) |
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(495 |
) |
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(1,067 |
) |
|
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(968 |
) |
Income
taxes |
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(6,292 |
) |
|
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(3,903 |
) |
|
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(6,780 |
) |
|
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(6,715 |
) |
Income
from equity accounted investment |
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(127 |
) |
|
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— |
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|
79 |
|
|
|
— |
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Foreign
currency (losses) gains |
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21,638 |
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(10,942 |
) |
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48,403 |
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(12,363 |
) |
Net income (loss) |
$ |
63,452 |
|
|
$ |
(74,507 |
) |
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$ |
139,359 |
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$ |
(69,724 |
) |
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1
FVTPL denotes fair value through profit and loss |
2
Warrant liability valuation gains (losses) relates to the mark to
market of the warrants. |
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Financial Profile and Net Book
Value
The Company’s principal investment is its
interest in 86 million Class A Limited Voting Shares (“Brookfield
shares”) of Brookfield, representing a 9% fully-diluted interest as
at June 30, 2018. In addition, the Company owns a diversified
investment portfolio of marketable securities.
The information in the following table has been
extracted from the Company’s Statement of Financial Position:
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Statement of
Financial Position |
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As
at(Thousands, US dollars, except per share amounts) |
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June 30, 2018 |
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December 31, 2017 |
Assets |
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Cash and cash
equivalents |
$ |
46,428 |
|
$ |
29,794 |
Investment in
Brookfield Asset Management Inc.1 |
|
3,479,914 |
|
|
3,737,431 |
Other investments
carried at fair value |
|
648,282 |
|
|
750,467 |
Accounts receivable and
other assets |
|
8,309 |
|
|
6,443 |
Equity accounted
investment |
|
15,878 |
|
|
13,643 |
Goodwill |
|
3,728 |
|
|
3,102 |
|
$ |
4,202,539 |
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$ |
4,540,880 |
Liabilities and
Equity |
|
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Accounts payable and
other liabilities |
$ |
33,434 |
|
$ |
103,096 |
Preferred shares2 |
|
551,997 |
|
|
575,620 |
Warrant liability |
|
168,527 |
|
|
233,958 |
Deferred taxes3 |
|
429,933 |
|
|
468,040 |
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1,183,891 |
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1,380,714 |
Equity |
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Common equity |
|
3,018,648 |
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3,160,166 |
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$ |
4,202,539 |
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$ |
4,540,880 |
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1 The
investment in Brookfield Asset Management Inc. consists of 86
million Brookfield shares with a quoted market value of $40.54 per
share as at June 30, 2018 (December 31, 2017 – $43.54). |
2
Represents $560 million of retractable preferred shares less $8
million of unamortized issue costs as at June 30, 2018 (December
31, 2017 – $585 million less $9 million). |
3 The
deferred tax liability represents the potential future income tax
liability of the Company recorded for accounting purposes based on
the difference between the carrying values of the Company’s assets
and liabilities and their respective tax values, as well as giving
effect to estimated capital and non-capital losses. |
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For further information, contact Investor
Relations at ir@pvii.ca or 647-503-6513.
Note: This news release contains
“forward-looking information” within the meaning of Canadian
provincial securities laws and “forward-looking statements” within
the meaning of applicable Canadian securities regulations. The
words “potential” and “estimated” and other expressions which are
predictions of or indicate future events, trends or prospects and
which do not relate to historical matters, identify forward-looking
information. Forward-looking information in this news release
includes statements with regard to the Company’s potential future
income taxes.
Although the Company believes that its
anticipated future results, performance or achievements expressed
or implied by the forward-looking statements and information are
based upon reasonable assumptions and expectations, the reader
should not place undue reliance on forward-looking statements and
information because they involve known and unknown risks,
uncertainties and other factors, many of which are beyond its
control, which may cause the actual results, performance or
achievements of the Company to differ materially from anticipated
future results, performance or achievement expressed or implied by
such forward-looking statements and information.
Factors that could cause actual results to
differ materially from those contemplated or implied by
forward-looking statements and information include, but are not
limited to: the financial performance of Brookfield Asset
Management Inc., the impact or unanticipated impact of general
economic, political and market factors; the behavior of financial
markets, including fluctuations in interest and foreign exchanges
rates; global equity and capital markets and the availability of
equity and debt financing and refinancing within these markets;
strategic actions including dispositions; changes in accounting
policies and methods used to report financial condition (including
uncertainties associated with critical accounting assumptions and
estimates); the effect of applying future accounting changes;
business competition; operational and reputational risks;
technological change; changes in government regulation and
legislation; changes in tax laws, catastrophic events, such as
earthquakes and hurricanes; the possible impact of international
conflicts and other developments including terrorist acts; and
other risks and factors detailed from time to time in the Company’s
documents filed with the securities regulators in Canada.
The Company cautions that the foregoing list of
important factors that may affect future results is not exhaustive.
When relying on the Company’s forward-looking statements and
information, investors and others should carefully consider the
foregoing factors and other uncertainties and potential events.
Except as required by law, the Company undertakes no obligation to
publicly update or revise any forward-looking statements and
information, whether written or oral, that may be as a result of
new information, future events or otherwise.
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