TORONTO — Onex Corp. swung to a more than $1 billion loss in the first quarter as a result of market volatility and economic disruption from the COVID-19 outbreak.
The investment management firm, which reports in U.S. dollars, said it suffered a net loss of $1.1 billion in the quarter ended March 31 compared with net earnings of $195 million a year earlier.
Some $985 million of the losses stemmed from its investing segment as the pandemic pushed down markets in March and created a broad net decline in the value of its underlying portfolio investments, Onex said.
The decrease in fair value of its investments ranged from declines of between one per cent and 77 per cent, including drop-offs in Parkdean Resorts and WestJet Airlines, which it took over last year.
"As I look back over our 36 years in business, I realize that Onex has seen wars, recessions and, yes, even pandemics," CEO Gerry Schwartz said on a conference call with analysts Friday.
"COVID-19 may be the worst. But I have enormous confidence in our team to navigate through the challenges ahead."
Nonetheless, the timing could hardly have been worse for Onex's acquisition of WestJet, completed in December — three months before the global travel industry collapsed as borders shut down and confinement measures took effect.
The Calgary-based airline has cancelled tens of thousands of trips — including all U.S. and international routes — through July 4 and grounded scores of planes, pushing down capacity to a fraction of its pre-pandemic level.
As of March 31, Onex had about $6 billion in shareholder capital under management.
On a per-share basis, Onex reported a first-quarter loss of $10.34 compared with earnings of $1.91 in the same quarter of 2019.
The firm maintained its dividend of 10 cents per subordinate voting share.
This report by The Canadian Press was first published May 15, 2020.
Companies in this story: (TSX:ONEX)
The Canadian Press
Note to readers: This is a corrected story. A previous version had the incorrect per share earnings for the first quarter of 2019.
