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TORONTO, Nov. 19, 2021 (GLOBE NEWSWIRE) – Partners Value Investments Inc. (the “Companyâ€, TSX: PVF.WT) today announced its financial results for the quarter ended September 30, 2021. All amounts are expressed in US dollars dollars.
The Company recorded adjusted earnings of $ 22.7 million for the quarter ended September 30, 2021, compared to $ 0.1 million in the prior year quarter. Adjusted earnings is defined as net earnings attributable to the Company, excluding the impact of revaluation gains and losses on our retractable shares and warrants liabilities, and is used to assess the continued performance of our underlying activities. Adjusted earnings higher in the quarter due to a foreign exchange gain of $ 13 million compared to a loss of $ 15 million in the prior year quarter, partially offset by higher expenses funding and taxes during the period.
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The Company recorded a net loss of $ 269 million for the quarter ended September 30, 2021, compared to $ 50 million in the prior year quarter. Net income was lower in the current quarter compared to the prior year quarter, primarily due to revaluation losses of $ 239 million related to the Company’s redeemable common shares. These shares are classified as a liability because of their exchangeable nature equivalent to a limited partnership unit. Thus, revaluation losses result from the appreciation of the Company’s unit price.
The market price of a Brookfield share was $ 53.51 per share on September 30, 2021 (December 31, 2020 – $ 41.27).
Consolidated statements of income
| (Unaudited) For the periods ended September 30 (In thousands of US dollars) |
Three months ended | Nine months ended | ||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||
| Investment income | ||||||||||||||||||
| Dividends | $ | 20,247 | $ | 20,694 | $ | 107,717 | $ | 64,506 | ||||||||||
| Other investment income | 1,116 | 1,061 | 4 160 | 2 184 | ||||||||||||||
| 21,363 | 21 755 | 111 877 | 66 690 | |||||||||||||||
| Expenses | ||||||||||||||||||
| Operating Expenses | (429 | ) | (125 | ) | (1,529 | ) | (692 | ) | ||||||||||
| Financing costs | (2 132 | ) | (571 | ) | (6,382 | ) | (722 | ) | ||||||||||
| Dividends on redeemable preferred shares | (7,207 | ) | (6,774 | ) | (26,425 | ) | (18,691 | ) | ||||||||||
| 11 595 | 14 285 | 77,541 | 46,585 | |||||||||||||||
| Other elements | ||||||||||||||||||
| Investment valuation gains (losses) | 2,692 | 3,747 | 8 685 | (10,298 | ) | |||||||||||||
| Revaluation loss on redeemable shares | (239,224 | ) | – | (718,318 | ) | – | ||||||||||||
| Valuation of warrants liabilities (losses) gains | (52,548 | ) | (49 688 | ) | (163 768 | ) | 71,898 | |||||||||||
| Amortization of deferred financing costs | (764 | ) | (625 | ) | (3 301 | ) | (1,748 | ) | ||||||||||
| Recovery of current taxes (charges) | (618 | ) | (1820 | ) | 1,627 | (1,946 | ) | |||||||||||
| Deferred taxes (charges) recovery | (3,310 | ) | (459 | ) | (11,481 | ) | (2.662 | ) | ||||||||||
| Foreign exchange gains (losses) | 13,122 | (15,004 | ) | (24,324 | ) | 54 816 | ||||||||||||
| Net income (loss) | $ | (269,055 | ) | $ | (49,564 | ) | $ | (833 339 | ) | $ | 156,645 | |||||||
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Financial profile
The Company’s principal investment is its interest in approximately 130 million Class A Limited Voting Shares (the “Brookfield Sharesâ€) of Brookfield. This represents a diluted 8% stake as at September 30, 2021. In addition, the Company holds a diversified investment portfolio of marketable securities.
The information contained in the following table is taken from the Company’s statement of financial position:
| Like a (In thousands of US dollars, except per share amounts) |
(Unaudited) September 30, 2021 |
December 31, 2020 | |||
| Assets | |||||
| Cash and cash equivalents | $ | 344 115 | $ | 316,709 | |
| Investment in Brookfield Asset Management Inc. 1 | 6,974,274 | 5,313,865 | |||
| Other investments recognized at fair value | 576,726 | 586,574 | |||
| Accounts receivable and other assets | 61,898 | 47,700 | |||
| $ | 7 957 013 | $ | 6 264 848 | ||
| Liabilities and equity | |||||
| Trade payables and other liabilities | $ | 13 879 | $ | 15,604 | |
| Corporate loans | 235 669 | 117,286 | |||
| Preferred shares2 | 595,470 | 694,148 | |||
| Redeemable common shares3 | 4,060,347 | – | |||
| Liability guarantee | 492,968 | 332,083 | |||
| Deferred taxes4 | 19,461 | 654,217 | |||
| 5,417,794 | 1,813,338 | ||||
| Equity | |||||
| Common equity3 | 2,539,218 | 4,451,509 | |||
| Preferred shares | 1 | 1 | |||
| $ | 7 957 013 | $ | 6 264 848 | ||
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- The investment in Brookfield Asset Management Inc. consists of approximately 130 million Brookfield shares with a listed market value of $ 53.51 per share as of September 30, 2021 (December 31, 2020 – $ 41.27).
- Represents $ 609 million of redeemable preferred shares less $ 14 million of unamortized issue costs as of September 30, 2021 (December 31, 2020 – $ 706 million less $ 12 million).
- In April 2021, the Company repurchased common shares and issued redeemable common shares, which are classified as a liability due to their redemption characteristics. Remeasurement gains or losses are recorded in the statement of operations.
- The deferred tax liability represents the potential future tax liability of the Company recognized for accounting purposes on the basis of the difference between the carrying amounts of the assets and liabilities of the Company and their respective tax values, as well as estimated capital and items excluding loss capital.
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For more information, contact Investor Relations at 416-956-5142.
Note: This press 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 or indicate future events, trends or prospects and which do not relate to historical matters, identify forward-looking information. The forward-looking information contained in this press release includes statements regarding potential future income taxes of the Company.
Although the Company believes that its anticipated future results, performance or achievements expressed or implied by forward-looking statements and information are based on reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve 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 Society differ materially from the anticipated future results, performance or achievements expressed or implied by such forward-looking statements and information.
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Factors that could cause actual results to differ materially from those expected or implied by forward-looking statements and information include, but are not limited to: Brookfield Asset Management Inc.’s financial performance, impact or unanticipated impact of economic, political and market factors; the behavior of financial markets, including fluctuations in interest rates and exchange rates; global equity and capital markets and the availability of equity and debt financing and refinancing in these markets; strategic actions, including provisions; changes in accounting policies and methods used to present the financial position (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 regulations 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 Company documents filed with 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 above factors as well as other uncertainties and potential events. Except as required by law, the Company assumes no obligation to publicly update or revise forward-looking statements and information, whether written or oral, that may result from new information, future events or otherwise.
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