Great-West Life’s net earnings fall slightly in first quarter

Great-West Lifeco Inc.’s net earnings fell slightly from the previous year as its assets under management grew to more than $675 billion.

The company’s profits for the quarter ended March 31 were $591 million, down from $620 million in the same quarter a year earlier. Great-West Life said in its quarterly earnings on Thursday it had restructuring costs of $28 million in the quarter, mostly related its health and retail businesses in Ireland and the completion of integration activities for its Empower Retirement division.

The company said last month it would cut about 1,500 positions, or 13 per cent of its Canadian workforce, over the next two years in response to changing technology and customer expectations.

Read: Great-West Life to eliminate 1,500 jobs in Canada

On Thursday, Great-West Life said that, as part of the changes, “a new strategic customer marketing function has been created to provide a more holistic customer experience through digital and innovative capabilities and services.” The company said it expects to incur a $215-million restructuring cost in the second quarter, reducing net earnings by $127 million.

Its assets under management at the end of the first quarter totalled $675.8 billion, up from $628.2 billion a year earlier. Consolidated assets under administration were about $1.3 trillion. 

“First-quarter earnings reflect strong sales in our Canadian and European businesses and the benefits of cost reduction initiatives in the U.S.,” Paul Mahon, chief executive, said in a statement.

“While underlying business fundamentals were positive in the quarter, earnings were impacted by currency headwinds and restructuring charges related to business integration activities and right-sizing of our cost base. We remain focused on advancing our business strategies by balancing efficiency gains with necessary investments in future growth across the company,” he said.

Read: Canadian pensions’ solvency ratio holds steady in Q1: Mercer

In Canada, net earnings were $255 million, which compares to $276 million in the first quarter of 2016. Sales in Canada increased to $3.7 billion, up 12 per cent from the first quarter of 2016. The company attributed the sales boost to individual wealth sales, which were up 14 per cent compared to the first quarter of 2016, and group wealth sales which, were up 13 per cent.

This article originally appeared on Benefits Canada’s companion site,