Fairfax India Holdings Corporation: First Quarter Financial Results
28 Avril 2022 - 11:05PM
Fairfax India Holdings Corporation (TSX: FIH.U) announces net
earnings of $55.8 million in the first quarter of 2022 ($0.38 net
earnings per diluted share), compared to net earnings of $255.4
million in the first quarter of 2021 ($1.66 net earnings per
diluted share), reflecting decreased net unrealized gains on
investments and increased net foreign exchange losses, partially
offset by a performance fee recovery and decreased income tax and
interest expense.
Highlights for the first quarter of 2022
included the following:
- Net change in
unrealized gains on investments of $69.9 million, principally from
an increase in the fair value of the company's investments in the
private companies Sanmar ($49.0 million) and NSE ($18.0 million),
and an increase in market prices of the company's investments in
the public companies IIFL Wealth ($39.8 million) and IIFL Finance
($5.4 million), partially offset by a decrease in market prices of
the company's investments in public companies CSB Bank ($22.0
million), Fairchem Organics ($16.4 million), and 5paisa ($6.1
million).
- The company
continued to buy back shares under its normal course issuer bid and
in the first three months of 2022 purchased for cancellation
1,897,532 subordinate voting shares at a net cost of $24.0 million
($12.65 per subordinate voting share).
- In accordance
with the Investment Advisory Agreement, which provides for the
payment of a performance fee of 20% of the increase in book value
per share in excess of a hurdle rate of 5% per annum, the company
recorded a performance fee recovery of $3.1 million for first
quarter of 2022 and at March 31, 2022 had accrued $80.0
million to the benefit of Fairfax Financial Holdings. The
performance fee, if any, will only be finally determined on
December 31, 2023 at the end of the three year measurement
period.
- On February 11,
2022 the company completed its investment of $32.5 million
(approximately 2.5 billion Indian rupees) for a 70.0% equity
interest in Jaynix Engineering Private Limited.
- On
March 30, 2022 the company entered into an agreement to sell
9.8% of its 13.6% equity interest in IIFL Wealth for total
consideration of approximately $191 million (approximately
14.5 billion Indian rupees). The transaction is subject to
customary closing conditions and approvals and is expected to close
in the third quarter of 2022.
- At
March 31, 2022 common shareholders' equity was $2,754.0
million, or book value per share of $19.77, compared to $2,774.8
million, or book value per share of $19.65, at December 31,
2021, an increase of 0.6%, primarily related to net earnings and
the impact of share purchases for cancellation during the first
three months of 2022, partially offset by unrealized foreign
currency translation losses as a result of the weakening of the
Indian rupee relative to the U.S. dollar.
Fairfax India is in strong financial health,
with cash and marketable securities of approximately $227
million.
There were 139.7 million and 149.4 million
weighted average common shares outstanding during the first
quarters of 2022 and 2021 respectively. At March 31, 2022
there were 109,337,820 subordinate voting shares and 30,000,000
multiple voting shares outstanding.
Fairfax India's detailed first quarter report
can be accessed at its website www.fairfaxindia.ca.
Fairfax India Holdings Corporation is an
investment holding company whose objective is to achieve long term
capital appreciation, while preserving capital, by investing in
public and private equity securities and debt instruments in India
and Indian businesses or other businesses with customers, suppliers
or business primarily conducted in, or dependent on, India.
For further
information, contact: |
John Varnell,
Vice President, Corporate Affairs |
(416) 367-4755 |
|
This press release may contain forward-looking
statements within the meaning of applicable securities legislation.
Forward-looking statements may relate to the company's or an Indian
Investment's future outlook and anticipated events or results and
may include statements regarding the financial position, business
strategy, growth strategy, budgets, operations, financial results,
taxes, dividends, plans and objectives of the company.
Particularly, statements regarding future results, performance,
achievements, prospects or opportunities of the company, an Indian
Investment, or the Indian market are forward-looking statements. In
some cases, forward-looking statements can be identified by the use
of forward-looking terminology such as “plans”, “expects” or “does
not expect”, “is expected”, “budget”, “scheduled”, “estimates”,
“forecasts”, “intends”, “anticipates” or “does not anticipate” or
“believes”, or variations of such words and phrases or state that
certain actions, events or results “may”, “could”, “would”,
“might”, “will” or “will be taken”, “occur” or
“be achieved”.
Forward-looking statements are based on our
opinions and estimates as of the date of this press release, and
they are subject to known and unknown risks, uncertainties,
assumptions and other factors that may cause the actual results,
level of activity, performance or achievements to be materially
different from those expressed or implied by such forward-looking
statements, including but not limited to the following factors: the
COVID-19 pandemic; oil price risk; geographic concentration of
investments; foreign currency fluctuation; volatility of the Indian
securities markets; investments may be made in foreign private
businesses where information is unreliable or unavailable;
valuation methodologies involve subjective judgments; financial
market fluctuations; pace of completing investments; minority
investments; reliance on key personnel and risks associated with
the Investment Advisory Agreement; lawsuits; use of leverage;
significant ownership by Fairfax may adversely affect the market
price of the subordinate voting shares; weather risk; taxation
risks; emerging markets; MLI; economic risk; and trading price of
subordinate voting shares relative to book value per share risk.
Additional risks and uncertainties are described in the company's
annual information form dated March 4, 2022 which is available on
SEDAR at www.sedar.com and on the company's website at
www.fairfaxindia.ca. These factors and assumptions are not intended
to represent a complete list of the factors and assumptions that
could affect the company. These factors and assumptions, however,
should be considered carefully.
Although the company has attempted to identify
important factors that could cause actual results to differ
materially from those contained in forward-looking statements,
there may be other factors that cause results not to be as
anticipated, estimated or intended. There can be no assurance that
such statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. The company does not
undertake to update any forward-looking statements contained
herein, except as required by applicable securities laws.
Fairfax India (TSX:FIH.U)
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