Fairfax India Holdings Corporation: Third Quarter Financial Results

Fairfax India Holdings Corporation: Third Quarter Financial Results

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

(Note: All dollar amounts in this press release are expressed in U.S. dollars except as otherwise noted. The financial results are derived from financial statements prepared using the recognition and measurement requirements of International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS® Accounting Standards"), except as otherwise noted, and are unaudited. This press release contains certain non-GAAP and other financial measures, including book value per share and cash and marketable securities, that do not have a prescribed meaning under IFRS Accounting Standards and may not be comparable to similar financial measures presented by other issuers. See "Glossary of non-GAAP and other financial measures" in the company's Interim Report for the three and nine months ended September 30, 2024 for further details.)

TORONTO, Oct. 31, 2024 (GLOBE NEWSWIRE) -- Fairfax India Holdings Corporation (TSX: FIH.U) announces net earnings of $34.0 million in the third quarter of 2024 ($0.25 net earnings per diluted share), compared to net earnings of $133.0 million in the third quarter of 2023 ($0.93 net earnings per diluted share). At September 30, 2024 the company's book value per share increased 0.7% to $21.67 from $21.52 at June 30, 2024 ($21.85 at December 31, 2023), primarily due to net gains on investments, partially offset by an increased provision for deferred income taxes.

Highlights for the third quarter of 2024 included the following:

  • Net change in unrealized gains on investments of $83.4 million principally from an increase in the fair value of the company's listed investment in IIFL Securities ($136.7 million) and private company investments in BIAL ($22.2 million), Maxop ($18.1 million) and Seven Islands ($9.3 million), partially offset by decreases in the fair values of the company's listed investments in CSB Bank ($42.7 million), IIFL Finance ($41.2 million) and Fairchem Organics ($12.4 million) and its investment in private company Sanmar ($17.0 million).
  • On October 11, 2024 the company completed its previously announced investment in Global Aluminium Private Limited ("Global Aluminium") for approximately $83 million (7.0 billion Indian rupees) of which the company has retained approximately $8.3 million (700.0 million Indian rupees) until the sellers complete certain post-closing obligations.

Fairfax India is in strong financial health, with cash and marketable securities at September 30, 2024 of $285.7 million, prior to the acquisition of Global Aluminium described above.

There were 135.2 million and 136.5 million weighted average common shares outstanding during the third quarters of 2024 and 2023, respectively. At September 30, 2024 there were 105,152,447 subordinate voting shares and 30,000,000 multiple voting shares outstanding.

Unaudited balance sheets, earnings (loss) and comprehensive income (loss) information follow and form part of this press release. Fairfax India's third 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: 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; disruption of the company's information technology systems; 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; trading price of subordinate voting shares relative to book value per share risk; and economic disruptions from the after-effects of the COVID-19 pandemic and the conflicts in Ukraine and the Middle East. Additional risks and uncertainties are described in the company's annual information form dated March 8, 2024 which is available on SEDAR+ at www.sedarplus.ca 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.

Information on      
CONSOLIDATED BALANCE SHEETS      
as at September 30, 2024 and December 31, 2023      
(unaudited - US$ thousands)      
 September 30, 2024
 December 31, 2023
 
Assets  
Cash and cash equivalents 23,614  174,615 
Short term investments 62,446   
Bonds 231,176  63,263 
Common stocks 3,389,953  3,581,043 
Total cash and investments 3,707,189  3,818,921 
       
Interest and dividends receivable 6,080  1,367 
Income taxes refundable 178  220 
Other assets 840  1,027 
Total assets 3,714,287  3,821,535 
   
Liabilities  
Accounts payable and accrued liabilities 975  912 
Accrued interest expense 2,361  8,611 
Income taxes payable 428   
Payable to related parties 10,345  120,858 
Deferred income taxes 144,738  108,553 
Borrowings 498,218  497,827 
Total liabilities 657,065  736,761 
   
Equity  
Common shareholders' equity 2,928,425  2,958,718 
Non-controlling interests 128,797  126,056 
Total equity 3,057,222  3,084,774 
  3,714,287  3,821,535 
       
Book value per share$        21.67 $21.85 
       


Information on
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
for the three and nine months ended September 30, 2024 and 2023
(unaudited - US$ thousands except per share amounts)
   
 Third quarterFirst nine months
  2024  2023  2024  2023 
Income            
Interest 5,687  4,128  15,455  13,322 
Dividends 1,639  8,333  9,177  16,623 
Net realized gains (losses) on investments 330  (218) 218,654  47,445 
Net change in unrealized gains (losses) on investments 83,390  177,463  (143,725) 317,121 
Net foreign exchange losses (2,322) (4,581) (2,334) (2,035)
  88,724  185,125  97,227  392,476 
Expenses    
Investment and advisory fees 10,384  10,376  29,990  28,662 
Performance fee   20,469    41,536 
General and administration expenses 1,698  1,126  6,342  10,788 
Interest expense 6,380  6,380  19,141  19,141 
  18,462  38,351  55,473  100,127 

Earnings before income taxes
 
70,262
  
146,774
  
41,754
  
292,349
 
Provision for income taxes 32,950  13,789  43,504  45,256 
Net earnings (loss) 37,312  132,985  (1,750) 247,093 

Attributable to:
    
Shareholders of Fairfax India 33,971  132,954  (5,391) 236,802 
Non-controlling interests 3,341  31  3,641  10,291 
  37,312  132,985  (1,750) 247,093 
             
Net earnings (loss) per share$        0.25 $0.97 $        (0.04)$1.73 
Net earnings (loss) per diluted share$        0.25 $0.93 $        (0.04)$1.65 
Shares outstanding (weighted average) 135,152,447  136,461,692  135,223,349  137,274,424 
             


Information on
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
for the three and nine months ended September 30, 2024 and 2023 (unaudited - US$ thousands)
 
 Third quarterFirst nine months
  2024  2023  2024  2023 
             
Net earnings (loss) 37,312  132,985  (1,750) 247,093 
Other comprehensive loss, net of income taxes    
Item that may be subsequently reclassified to net earnings (loss)    
Unrealized foreign currency translation losses, net of income taxes of nil (2023 - nil) (15,243) (35,672) (21,584) (12,129)
Comprehensive income (loss) 22,069  97,313  (23,334) 234,964 

Attributable to:
    
Shareholders of Fairfax India 19,365  98,788  (26,075) 225,186 
Non-controlling interests 2,704  (1,475) 2,741  9,778 
  22,069  97,313  (23,334) 234,964 
             


Top