Winnipeg-based Power Financial Corp.’s operating earnings for the six months ended June 30 were $694 million, a drop of 36% compared with $1.1 billion in the corresponding period in 2008.

The decrease in operating earnings reflects primarily the decrease in the contribution from the corporation’s subsidiaries and Parjointco NV, in which it holds a 50% stake.

Net earnings, including other items, for the six-month period ended June 30 were $647 million, a 61% declined compared with $1.7 billion in the same period in 2008.

For the quarter ended June 30, Power Financial’s operating earnings were $442 million vs $590 million in Q2 2008. Net earnings for the quarter fell by 58% to $452 million from $1.1 billion in Q2 2008.

Power Financial subsidiary Great-West Lifeco Inc. reported adjusted net income of $739 million for the six-month period ended June 30 vs $1.100 billion in the corresponding period of 2008. For the three-month period ended June 30, GWL reported adjusted net earnings of $413 million vs adjusted earnings of $564 million in the same period in 2008.

The above amounts exclude the following non-recurring items recorded by GWL in the six-month and three-month periods ended June 30, 2008. In the first quarter of 2008, GWL recorded two non-recurring items totalling $118 million after taxes consisting of: (a) a gain realized in connection with the termination of a long standing assumption reinsurance agreement for an amount of $176 million; and (b) a reserve strengthening in Great-West Life & Annuity Insurance Co.’s continuing operations for a charge of $58 million.

In Q2 2008, GWL recorded a gain of $649 million, representing the gain on the sale of its U.S. health-care business.

Including these non-recurring items, net income for the six-month period ended June 30, was $739 million compared with $1.9 billion in the corresponding period of 2008. For the three-month period ended June 30, net income was $413 million or compared with $1.2 billion in the corresponding period of 2008.

GWL’s contribution to Power Financial’s operating earnings was $508 million for the six-month period ended June 30 compared with $773 million for the corresponding period in 2008. For the three-month period ended, GWL’s contribution to Power Financial’s operating earnings was $284 million, compared with $396 million in 2008.

As for IGM Financial Inc., net income for the six months ended June 30, was $278 million, compared with adjusted net income of $427 million in 2008. Adjusted net income for the six months ended June 30, 2008 excluded $25 million, which represented IGM’s proportionate share of GWL’s after-tax gain on the sale of Great-West Healthcare recorded in Q2.

For the six-month and three-month periods ended June 30, IGM contributed $153 million and $85 million, respectively, to Power Financial’s operating earnings, compared with $237 million and $118 million in 2008.

Power Financial holds a 50% interest in Parjointco, which in turn holds a 54.1% interest in Pargesa Holding SA. Pargesa reported operating earnings of SF243 million in the six-month period ended June 30 compared with SF438 million for the corresponding period in 2008. The decrease is mainly due to lower contribution from Imerys and Lafarge.

For the three-month period ended June 30, Pargesa’s operating earnings were SF312 million, compared with SF363 million in the corresponding period of 2008.

Expressed in Canadian dollars, the contribution from the investment at equity to Power Financial’s operating earnings was $68 million for the six-month period, compared with $117 million for the corresponding period in 2008. For Q2 2009, the contribution from Pargesa to Power Financial’s operating earnings was $88 million compared with $100 million in Q2 2008.