Mutual fund manager AGF Management Ltd. is has reported weaker first-quarter earnings.

The firm blamed a change in the way it accounts for goodwill and taxes for the drop in profit, and says the sales held steady in the first quarter.

AGF reported net income of $33.9 million, or 37¢ per share, in the quarter ended Feb. 28, compared with net income of $62.2 million, or 68¢ per share, in the corresponding period last year.

Revenues in the quarter were flat at $162.6 million, compared with $162.5 million. Expenses, excluding income taxes, rose to $119.2 million fromC$117.4 million.

“New accounting policies for goodwill and other intangible assets (adopted Dec. 1, 2001) and income taxes (adopted December 1, 2000) have caused significant fluctuations in net income, which distort year-over-year performance comparisons,” the company said in a statement.

AGF said total assets under management reached a new high at $36 billion earlier this month. During the first quarter of fiscal 2002, net fund net sales of reached $646.4 million.

The company also raised its quarterly dividend by 8.3% to 6.5¢.