IGM Financial Inc. Reports Record High Second Quarter Earnings
Readers are referred to the disclaimer regarding Forward-Looking Statements, Non-IFRS Financial Measures and Additional IFRS Measures at the end of this Release.
WINNIPEG, MB, Aug. 4, 2021 /CNW/ - IGM Financial Inc. (IGM or the Company) (TSX: IGM) today announced earnings results for the second quarter of 2021.
"Earnings per share of 99 cents in the quarter is the highest result in IGM's history," said James O'Sullivan, President and Chief Executive Officer of IGM Financial Inc. "The result reflects record high second quarter client inflows across the companies and continued strong investment returns for our clients."
Net earnings available to common shareholders for the six months ended June 30, 2021 were $439.6 million or $1.84 per share compared to $344.4 million or $1.45 per share for 2020.
Net earnings in the second quarter of 2021 was $134.3 million and represented 57.1% of IGM's net earnings. This was an increase of 33.6% compared to the second quarter of 2020.
Record high assets under advisement at June 30, 2021 of $143.3 billion, an increase of 4.7% from $136.9 billion at March 31, 2021 and an increase of 19.0% from $120.5 billion at June 30, 2020.
IG Wealth Management
Record high assets under advisement at June 30, 2021 of $112.2 billion, an increase of 4.9% from $107.0 billion at March 31, 2021 and an increase of 19.6% from $93.8 billion at June 30, 2020.
Highest second quarter net client inflows of $670 million, an increase of $732 million from net client outflows of $62 million in the second quarter of 2020. Net client inflows for the six month period were $1.7 billion, an increase of $1.4 billion from net client inflows of $319 million in 2020.
Record high second quarter gross client inflows of $3.2 billion, up 69.4% from gross inflows of $1.9 billion in 2020.
ASSET MANAGEMENT (MACKENZIE INVESTMENTS)
Net earnings in the second quarter of 2021 was $56.5 million and represented 24.0% of IGM's net earnings. This was an increase of 54.4% compared to the second quarter of 2020.
Total assets under management were at an all-time high of $201.7 billion, an increase of 5.3% from $191.6 billion at March 31, 2021 and an increase of 44.3% from $139.7 billion at June 30, 2020. The increase from last year included $30.3 billion or 21.7% from the net business acquisitions in the fourth quarter of 2020 of GLC Asset Management Group Ltd. (GLC) and Greenchip Financial Corp. (Greenchip). Assets under management excluding sub-advisory to the Wealth Management segment were $122.9 billion at June 30, 2021, an increase of 6.4% from March 31, 2021 and 73.6% from June 30, 2020. The net business acquisitions represented 42.8% of the increase from the prior year.
Record high second quarter investment fund net sales in the quarter of $1.7 billion, compared to $1.1 billion2 in 2020. Net sales for the six month period were $3.5 billion1 compared to net sales of $1.5 billion2 a year ago.
Record high second quarter gross mutual fund sales in the quarter of $3.0 billion, an increase of 19.6% from $2.5 billion2 in the second quarter of 2020. Mutual fund net sales for the second quarter were $1.1 billion compared to net sales of $376 million2 in 2020.
ETF business - ETF assets under management totalled $10.6 billion at June 30, 2021, up from $6.6 billion at June 30, 2020. Excluding investment in ETFs by IGM mutual funds, ETF assets under management were $4.9 billion at June 30, 2021, compared to $3.1 billion at June 30, 2020.
STRATEGIC INVESTMENTS AND OTHER
Wealthsimple – On May 3, 2021, Wealthsimple announced a $750 million equity fundraising which increased the value of IGM's investment in Wealthsimple to $1.45 billion. As a result of the transaction, IGM disposed of a portion of its investment for proceeds of $294 million ($258 million after-tax), and continues to hold a 23% interest valued at $1.15 billion.
Great-West Lifeco Inc. (Lifeco) – The Company's proportionate share of Lifeco's second quarter earnings was $31.3 million, a decrease of 9.3% from $34.5 million in the second quarter of 2020.
China Asset Management Co., Ltd. (China AMC) – The Company's proportionate share of China AMC's second quarter earnings was $15.1 million, an increase of 46.6% from $10.3 million in the second quarter of 2020 and was the highest quarterly result since IGM's investment in China AMC.
This information is based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking statements, including the perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances. While the Company considers these assumptions to be reasonable based on information currently available to management, they may prove to be incorrect.
By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved.
A variety of material factors, many of which are beyond the Company's and its subsidiaries' control, affect the operations, performance and results of the Company, and its subsidiaries, and their businesses, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to: the impact or unanticipated impact of general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, management of market liquidity and funding risks, 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, operational and reputational risks, business competition, technological change, changes in government regulations and legislation, changes in tax laws, unexpected judicial or regulatory proceedings, catastrophic events, outbreaks of disease or pandemics (such as COVID-19), the Company's ability to complete strategic transactions, integrate acquisitions and implement other growth strategies, and the Company's and its subsidiaries' success in anticipating and managing the foregoing factors.
The reader is cautioned that the foregoing list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. The reader is also cautioned to consider these and other factors, uncertainties and potential events carefully and not place undue reliance on forward-looking statements.
Other than as specifically required by applicable Canadian law, the Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statements are made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.
Additional information about the risks and uncertainties of the Company's business and material factors or assumptions on which information contained in forward-looking statements is based is provided in its disclosure materials filed with the securities regulatory authorities in Canada, available at www.sedar.com.
NON-IFRS FINANCIAL MEASURES AND ADDITIONAL IFRS MEASURES
Terms by which non-IFRS financial measures are identified include but are not limited to "adjusted net earnings available to common shareholders", "adjusted earnings per share", "adjusted return on average common equity" and other similar expressions used to provide management and investors with additional measures to assess earnings performance. However, non-IFRS financial measures do not have standard meanings prescribed by IFRS and are not directly comparable to similar measures used by other companies. Please refer to the attached Financial Highlights for the appropriate reconciliations of these non-IFRS financial measures to measures prescribed by IFRS.
Terms by which additional IFRS measures are identified include "earnings before income taxes" and "net earnings available to common shareholders". Additional IFRS measures are used to provide management and investors with additional measures to assess earnings performance. These measures are considered additional IFRS measures as they are in addition to the minimum line items required by IFRS and are relevant to an understanding of the entity's financial performance.
SECOND QUARTER WEBCAST AND CONFERENCE CALL
The most recent Consolidated Financial Statements and Management's Discussion and Analysis (MD&A) of operating results are available on IGM Financial Inc.'s website at www.igmfinancial.com.
ABOUT IGM FINANCIAL INC.
SOURCE IGM Financial Inc.
Company Codes: Toronto:IGM
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