(Montreal) Geopolitical instability and rising inflation represent headwinds for Power Corporation of Canada, but President and CEO Jeffrey Orr says it’s still too early to estimate the impact.
Posted at 12:45 p.m.
The business environment is more challenging than “three or four months ago,” he said on a conference call to discuss fourth quarter results on Friday.
“Our business progresses best when investor confidence is high and money goes into investment funds. These big macro-economic questions would have an impact on our businesses, but it is still too early to know at this point. »
The Desmarais family conglomerate has a variety of investments in the insurance, wealth management and mutual fund sectors, as well as investments in renewable energy and stakes in companies like the maker of Lion Electric buses and electric trucks.
Mr. Orr said Power Corporation had little exposure to what was happening directly on the ground in Russia and Ukraine. “We don’t have a big exposure to Russia or Ukraine, it’s minimal. »
PHOTO ANDRE PICHETTE, PRESS ARCHIVES
Power Corporation of Canada President and CEO Jeffrey Orr
Mr. Orr also discussed the factors that led Power Sustainable, an asset manager that invests in renewable energy, to register a charge of 15 million in the fourth quarter.
He explained that the supply chain disruption has delayed wind projects. He added that the value of carbon credits had not been as high as expected in a “volatile market” dominated by “a limited number” of players.
The leader assured that the war in Ukraine had no connection with this charge. “I believe that there are no direct impacts with these events in Europe that would affect our manufacturing needs, apart from inflation. »
Profit similar to expectations
Power announced the day before results relatively similar to analysts’ forecasts for the fourth quarter.
The company posted a stable profit attributable to shareholders at 626 million, compared to 623 million in the same period the previous year.
Adjusted earnings per share hit $1, matching analysts’ forecast, according to financial data firm Refinitiv.
“Great-West and IGM Financial’s contribution was in line with our expectations,” said Graham Ryding of TD Securities. Groupe Bruxelles Lambert was below expectations while alternative platforms and individual businesses performed better than we expected. »
The company said it had met its cost reduction targets, which reached 50 million, following its reorganization completed in February 2020 as part of which it acquired the minority stakes of Power Financial. A proportion of 93% of the target had already been achieved during the previous quarter.
Power Corp. holds full control of Power Financial and therefore majority interests in Great-West Lifeco, IGM Financial and Wealthsimple Financial Corp., as well as a minority interest in Pargesa Holding.
Around noon, the stock fell 39 cents, or 1%, to $38.45 on the Toronto Stock Exchange on Friday.