The company reported fourth-quarter earnings on Friday and saw a net loss of $9.5-million, a major decline from $124-million in profit for the same quarter in 2021
reported a steep drop in profit in the final quarter of last year as it prepares to launch the initial public offering of its U.S. business, but said investors pumped more money into its Canadian retail funds.
CI said in a news release the loss was partly owing to an increase in the future payments to the executives and previous owners of the U.S. wealth management firms it has acquired over the past few years. Every quarter, CI estimates how much it will owe in these payments, based on financial targets such as the firms’ earnings. If the estimate increases, CI books an expense, which was $76.8-million in the fourth quarter.
firms scattered across the U.S. RIAs typically follow an independent business model – meaning they are not part of a larger brokerage, like Canadian advisers, and U.S. advisers have a legal fiduciary obligation to act in the best interests of clients. “The path that we’re pursuing currently is getting ourselves ready for our IPO,“ Mr. MacAlpine told analysts. “We’re working through the structural changes in the process to do that, and we should be ready once we get through the back end of the approvals.”
One of CI’s key balance sheet metrics got worse in the fourth quarter. Net debt – the company’s borrowings, offset by its cash – compared with its adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization. The measure calculates how many years of profits it will take to pay off the debt; the smaller the ratio, the better.
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