CI Financial Corp. (TSX: CIX, NYSE: CIXX) reported second quarter 2022 results this morning. As CIX is a Canadian-based firm, all financial amounts are reported in Canadian dollars. Adjusted Earnings Per Share (EPS) was $0.78, up 5% from last year.
Here are five things you should know about this earnings call:
- Total Assets Under Management (AUM) and client assets fell to $333.7 billion from $361.0 billion in the previous quarter. Declines were primarily a result of market headwinds resulting in lower average assets, as well as some asset outflows in the Asset Management segment. Further declines were offset by the asset acquisitions during the quarter. Year-over-year, total AUM and client assets were up from $297.5 billion thanks to significant increases in U.S. Wealth Management assets over the past year.
- Net revenue was $566.7 million, down from $633.8 million in 1Q2022 but up from $524.7 million in 2Q2021. Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization) margin fell to 44.5% from 46.5% in 1Q2022 and 48.4% in 2Q2021. Declines in net revenue primarily reflected a decrease in fees from the Asset Management segment and lower fees in the Canadian Wealth segment resulting from deteriorating capital markets. An increase in U.S. Wealth segment fees resulting from acquisitions closed in the quarter offset further declines.
- In the second quarter, CIX completed the acquisitions of two U.S.-based registered investment advisors based in Newport Beach, California, and Houston, Texas, as well as one Canadian firm. These acquisitions added $9 billion of client assets.
- CIX has announced its intention to sell up to 20% of its U.S. wealth management business via a U.S. Initial Public Offering (IPO). The company plans to submit a Form S-1 this year. Management believes this IPO will be the best way to maximize shareholder value and intends to use the net proceeds from the IPO to pay down debt.
- The company also applied for a charter to establish and operate a South Dakota trust company in the quarter. When granted, the charter will allow CIX’s U.S. Wealth Management business to offer administrative trust solutions.
To learn more visit – CI Financial Reports Financial Results for the Second Quarter of 2022
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