Power Co. of Canada Q2 Earnings Call Highlights

Power Corp. delivered record Q2 results: Adjusted EPS rose 12% year over year to C$1.55, while adjusted net earnings increased 10% to C$974 million, supported by growth at Great-West Lifeco and IGM Financial, portfolio valuation gains and a lower share count. Core operating businesses posted strong growth: Great-West’s contribution rose 10%, with Empower client assets exceeding C$2 trillion, while IGM’s contribution jumped 34% and assets under management and administration reached a record C$622 billion. Capital returns and simplification remain central priorities: Power returned C$1.5 billion to shareholders in the first half, views its shares—trading at a 20% discount to NAV—as attractive for buybacks, and plans to pursue multiyear efforts to simplify its corporate structure. Power Co. of Canada TSE: POW reported record second-quarter adjusted earnings per share of C$1.55, up 12% from a year earlier, as earnings growth at Great-West Lifeco and IGM Financial, higher valuations for certain portfolio investments and a lower share count supported results. Adjusted net earnings totaled C$974 million, up 10% year over year. Reported net earnings were C$690 million, or C$1.10 per share. Net asset value per share reached C$112.94 at the end of the quarter, up 74% from a year earlier and 34% from the prior quarter. As of the prior night's market close, adjusted NAV per share stood at C$116.01, Chief Financial Officer Jake Lawrence said. James O'Sullivan, who became president and chief executive officer on July 1, said the company does not anticipate major strategic changes. He said Power will continue emphasizing active ownership, organic investment in existing businesses, selective mergers and acquisitions, dividends and share repurchases. “Power has made strong progress against its value creation strategy,” O'Sullivan said, adding that transparency and investor communication would remain priorities. Operating businesses post double-digit growth Great-West contributed C$871 million to Power's adjusted net earnings, up 10% from the prior year. Great-West reported base EPS of C$1.42, a 15% increase, while its base return on equity was 19.3%, exceeding its stated medium-term objective of more than 19% for a second consecutive quarter. Lawrence said the results reflected double-digit base-earnings growth at Empower and strong growth in Great-West's capital and risk solutions business. Empower's retirement-business client assets surpassed C$2 trillion during the quarter. Empower also announced an agreement to acquire Milliman's defined benefit business. The transaction, expected to close in the second half of 2026, is expected to add 1.5 million participants and C$130 billion in client assets. Great-West had C$2.5 billion of cash at its holding company at quarter-end and repurchased C$925 million of shares year to date. IGM contributed C$211 million to Power's adjusted net earnings, an increase of 34% from the prior year. IGM reported record adjusted EPS of C$1.41, up 32%, with double-digit earnings growth across wealth management, asset management and corporate and other operations. IGM's net flows across IG Wealth and Mackenzie totaled C$2.2 billion, while assets under management and administration, including strategic investments, reached a record C$622 billion. IGM returned C$386 million to shareholders through dividends and share repurchases during the first half. O'Sullivan said he would be comfortable with Power's ownership interest in IGM increasing if Power does not participate in IGM's repurchases. He said IGM's planned 5% buyback provides support to minority shareholders while allowing Power to own more of a business he described as having strong core and strategic operat...