Aimia Reports Third Quarter 2021 Results
Canada NewsWire
TORONTO, Nov. 11, 2021
(All figures in Canadian dollars unless otherwise noted)
TORONTO, Nov. 11, 2021 /CNW/ - Aimia Inc. (TSX: AIM) reported its financial results for the three and nine months ended September 30, 2021.
Q3 2021 Highlights:
-- Aimia reported income of $7.0 million and net earnings from continuing
operations of $3.5 million.
-- PLM generated net earnings of $10.0 million and adjusted EBITDA of $17.7
million; Aimia received a $6.3 million distribution from PLM.
-- Aimia invested $44.0 million (US$35.0 million) in TRADE X, a global B2B
automotive cross-border trading platform, at a pre-money valuation of
$314 million (US$250 million), representing a 12.3% equity stake on a
fully diluted basis.
-- The privatization of Clear Media Limited was completed following the
acquisition of all the remaining shares by the consortium of investors
through their special purpose vehicle.
Subsequent to the end of the quarter:
-- Aimia announced that it is in discussions with Aeromexico and its Debtors
regarding a potential transaction whereby Aimia would divest its 48.9%
equity stake in PLM which would become a wholly-owned subsidiary of
Aeromexico.
-- Aimia invested $12.4 million in a new special purpose vehicle created to
pursue a leveraged buyout strategy.
Q3 2021 financial highlights -- continuing operations, unless otherwise noted:
HIGHLIGHTS Three Months Ended September 30,
(in millions of Canadian dollars, 2021 2020 YoY %
except per share amounts) Change
Continuing operations(1)
--------------------------------------
Income 7.0 (1.1) **
Expenses 3.1 8.8 -64.8%
Earnings (loss) before income taxes 4.7 (9.9) **
Net Earnings (loss) 3.5 (10.7) **
Loss per Common Share - (0.15) **
Distributions received from PLM 6.3 - **
Cash used in Operating Activities (1.0) (7.7) -87.0%
Consolidated
--------------------------------------
Net Earnings (loss) 3.5 (10.8) **
Loss per Common Share - (0.15) **
Cash used in Operating Activities (1.0) (7.7) -87.0%
** Information not meaningful
1. Continuing operations refers to consolidated results
excluding discontinued operations.
This quarterly earnings release should be read in conjunction with Aimia's consolidated financial statements and MD&A which can be accessed on SEDAR as well as the company's website under Investor Relations.
Phil Mittleman, Chief Executive Officer, commented: "We are very pleased with our third quarter results. Aimia has an exciting portfolio of assets, including our new investment in TRADE X, a business which generated $87 million in gross vehicle sales and positive EBITDA in the third quarter of 2021. With regard to PLM, our discussions with Aeromexico in respect to a potential transaction are ongoing, and we look forward to providing an update at the appropriate time. We will continue to pursue our strategy of maximizing the value of our existing holdings while seeking out new investment opportunities to deliver strong returns to our stakeholders."
Segment Highlights for Q3 2021
The Holdings segment includes Aimia's equity-accounted investments in PLM, Kognitiv, and investments in Clear Media Limited, TRADE X, a special purpose vehicle, and minority investments in various public securities and investments in limited partnerships. Also included are holding company operating costs related to public company disclosure and Board costs, executive leadership, finance and administration.
The Investment Management segment consists of the discretionary portfolio management services provided to institutional investors and high net worth individuals operated under Mittleman Investment Management, LLC ("MIM").
Holdings segment results
During the third quarter of 2021, total income was $6.5 million, mostly due to the $6.3 million unrealized fair value gain of Aimia's investment in AirAsia.
Expenses were $2.7 million, down from $8.3 million in the same quarter last year, mainly due to a decrease in compensation and benefits expense driven by a decrease of $2.7 million of share-based compensation and other performance awards. Excluding share-based compensation and other compensation awards, expenses were $2.9 million, a decrease of $2.9 million from $5.8 million last year.
Investment Management segment results
During the third quarter of 2021, revenue from investment management fees were $0.7 million, and earnings before income taxes were $0.1 million.
Assets under management were $199.8 million as of September 30, 2021. This represents a 0.8% decrease from the $201.4 million assets under management as of September 30, 2020.
Equity-accounted Investment Performance Summary
PLM
Our 48.9% equity stake in PLM, owner and operator of Club Premier, the coalition loyalty program in Mexico that operates the Aeromexico frequent flyer program, delivered the following financial results for the three and nine months ended September 30, 2021 and 2020. A detailed analysis of its financial performance is available in the MD&A:
PLM operating metric (millions) Q3 2021 Q3 2020 9M 2021 9M 2020
Enrolled members 7.3 6.9 7.3 6.9
PLM financial metric (millions of Canadian
dollars) Q3 2021 Q3 2020 9M 2021 9M 2020
Revenue 57.1 36.0 153.1 142.0
Net earnings(2) 10.0 11.5 30.7 4.1
Gross Billings 62.4 35.0 162.0 149.0
Adjusted EBITDA(1)(3) 17.7 13.7 47.6 39.2
Cash from (used in) operating
activities(4)(5) 30.1 8.5 85.4 (67.0)
Free Cash Flow(1)(4)(5) 29.7 8.3 84.2 (67.5)
Cash and cash equivalents 128.2 63.6 128.2 63.6
1. A non-GAAP measurement. Non-GAAP financial measures
are defined and reconciled to the most comparable
IFRS measures in the section "Non-GAAP Financial Measures
and Reconciliation to Comparable GAAP Measures" of
this earnings release. See caution regarding Non-GAAP
financial measures at the end of this earnings release.
2. 9M 2020 includes the impact of a $13.2 million
(US$9.8 million) related to the provision on certain
Aeromexico unsecured receivables.
3. 9M 2020 includes the impact of $7.6 million (US$5.5
million) related to the provision on certain Aeromexico
unsecured receivables.
4. Q3 and 9M 2021 include the benefit of $12.3 million
(Q3 2020: $13.1 million) and $32.7 million (9M 2020:
$15.4 million) from the usage of the prepaid rewards
tickets.
5. 9M 2020 includes the impact of $20.1 million (US$15.0
million) pre-purchase of award tickets in Q1 2020,
and the impact of $69.3 million (US$50.0 million)
pre-purchase of award tickets in Q2 2020.
KOGNITIV
Aimia owns a 48.8% stake in Kognitiv, a B2B technology company that enables collaborative commerce for global clients across the financial services, media, telecom, hospitality and retail sectors. Clients including banks, major retailers, and loyalty program providers can collaborate in safe, peer-to-peer networks with hotels, airlines and other industries with perishable inventory, to increase their yield on assets, significantly reduce distribution costs, and leverage zero-party data to create hyper-personalized offers that drive customer lifetime value.
The table below summarizes the performance of Kognitiv for the three and nine months ended September 30, 2021 and 2020. A detailed analysis of its performance is available in the MD&A:
Kognitiv (millions of Canadian dollars) Q3 2021 Q3 2020 9M 2021 9M 2020(2)
Revenue(1) 14.0 21.3 41.5 25.3
Net loss (9.6) (8.5) (36.6) (8.7)
Adjusted EBITDA(1)(3) (8.5) (5.7) (31.9) (6.2)
1. Kognitiv's financial results are presented on a
continuing operations basis, excluding ISS discontinued
operations.
2. Aimia closed the Kognitiv transaction on June 18,
2020.
3. A non-GAAP measurement. Non-GAAP financial measures
are defined and reconciled to the most comparable
IFRS measures in the section "Non-GAAP Financial Measures
and Reconciliation to Comparable GAAP Measures" of
this earnings release. See caution regarding Non-GAAP
financial measures at the end of this earnings release.
Other Investments
TRADE X
On July 27, 2021, Aimia announced that it had invested $44.0 million (US$35.0 million) as the lead investor of the convertible preferred shares funding round for TRADE X, a global B2B cross-border automotive trading platform, at a US$250 million pre-money valuation.
Following Aimia's announcement of this transaction, an additional US$10.0 million of convertible preferred shares were issued by TRADE X to other strategic investors in a subsequent closing, bringing Aimia's fully diluted stake in TRADE X to 12.3%.