Fairfax India Holdings Corporation
TSX : FIH.U

Fairfax India Holdings Corporation

February 18, 2016 17:28 ET

Fairfax India Holdings Corporation: Financial Results for the Year Ended December 31, 2015

TORONTO, ONTARIO--(Marketwired - Feb. 18, 2016) -

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

(Note: All dollar amounts in this news release are expressed in U.S. dollars except as otherwise noted. The financial results are prepared using International Financial Reporting Standards except as otherwise noted.)

Fairfax India Holdings Corporation (TSX:FIH.U) announces fiscal year 2015 net earnings of $40.9 million ($0.42 per basic share), derived from interest income on its investment portfolio and unrealized gains on investments. Book value per share at December 31, 2015 was $9.50 as a result of unrealized foreign currency translation losses, partially offset by the 2015 net earnings.

Highlights in the fourth quarter of 2015 included the following:

  • On November 4, 2015 the company agreed with existing shareholders of ADI Finechem Limited (ADI) to acquire 45% of ADI. The acquisition was completed on February 8, 2016 for consideration of approximately $19 million.

  • On December 1, 2015 the company acquired 21.85% of IIFL Holdings Limited (formerly India Infoline Limited) for consideration of approximately $202 million.

  • At December 31, 2015, common shareholders' equity was $1,013.3 million, or $9.50 per share.

There were 106.7 million weighted average shares outstanding during the fourth quarter of 2015. At December 31, 2015 there were 76,678,879 subordinate voting shares and 30,000,000 multiple voting shares outstanding.

Unaudited consolidated balance sheet, earnings and comprehensive income information follow and form part of this news release.

Fairfax India Holdings Corporation is an investment holding company. Its investment 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.

This press release may contain forward-looking information within the meaning of applicable securities legislation. Forward-looking statements may relate to the future Company's 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 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 the opinions and estimates of the Company 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: taxation of the Company and its subsidiaries; substantial loss of capital; long-term nature of investment; limited number of investments; geographic concentration of investments; potential lack of diversification; financial market fluctuations; pace of completing investments; control or significant influence position risk; minority investments; ranking of Company investments and structural subordination; follow-on investments; prepayments of debt investments; risks upon dispositions of investments; bridge financings; reliance on key personnel; effect of fees; performance fee could induce Fairfax to make speculative investments; operating and financial risks of investments; allocation of personnel; potential conflicts of interest; employee misconduct at the portfolio advisor could harm the Company; valuation methodologies involve subjective judgments; lawsuits; foreign currency fluctuation; derivative risks; unknown merits and risks of future investments; resources could be wasted in researching investment opportunities that are not ultimately completed; investments may be made in foreign private businesses where information is unreliable or unavailable; illiquidity of investments; competitive market for investment opportunities; use of leverage; investing in leveraged businesses; regulation; investment and repatriation restrictions; aggregation restrictions; restrictions relating to debt securities; pricing guidelines; emerging markets; corporate disclosure, governance and regulatory requirements; legal and regulatory risks; volatility of the Indian securities markets; political, economic, social and other factors; governance issues risk; Indian tax law; changes in law; exposure to permanent establishment; enforcement of rights; smaller company risk; due diligence and conduct of potential investment entities; Asian economic risk; reliance on trading partners risk; natural disaster risks; government debt risk; and economic risk. Additional risks and uncertainties are described in the Company's annual information form dated March 30, 2015 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.

CONSOLIDATED BALANCE SHEETS
as at December 31, 2015 and December 31, 2014
(unaudited - US$ '000)
December 31,
2015
December 31, 2014
Assets
Cash and cash equivalents 12,464 235
Restricted cash 6,457 -
Interest receivable 27,680 -
Investments 978,569 -
Other assets 281 -
1,025,451 235
Total assets 1,025,451 235
Liabilities
Accrued expenses 743 -
Payable to related parties 1,993 235
Income taxes payable 9,386 -
Total liabilities 12,122 235
Equity
Common shareholders' equity 1,013,329 -
Total equity 1,013,329 -
1,025,451 235
CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
for the three and twelve months ended December 31, 2015 and for the period of November 25, 2014 (date of incorporation) to December 31, 2014
(unaudited - US$ '000 except per share amounts)
Fourth quarter Year ended December 31, Period ended December 31,
2015 2014 2015 2014
Income
Interest income 11,983 - 44,699 -
Net realized gains on investments 994 - 83 -
Net unrealized gains on investments 16,619 - 17,675 -
Net foreign exchange gains 71 - 2,794 -
29,667 - 65,251 -
Expenses
Investment and advisory fees 1,886 - 5,393 -
General and administration expenses 673 - 5,515
2,559 - 10,908 -
Earnings before income taxes 27,108 - 54,343 -
Provision for income taxes 6,317 - 13,404 -
Net earnings attributable to common shareholders 20,791 - 40,939 -
Item that may be subsequently reclassified to net earnings
Unrealized foreign currency translation losses on foreign operations, net of income taxes of nil (8,145 ) - (55,263 ) -
Comprehensive income (loss) attributable to common shareholders 12,646 - (14,324 ) -
Net earnings per share $0.20 $- $0.42 $-
Shares outstanding (weighted average) 106,678,879 1 98,019,189 1

Contact Information

  • Fairfax India Holdings Corporation
    John Varnell
    Chief Financial Officer
    (416) 367-4755
    www.fairfaxindia.ca