Apollo Global Management Q4 Results Hit By Energy Sector Fallout

(RTTNews) - The fallout in the energy sector reflected in private equity firm Apollo Global Management LLC's (APO) fourth-quarter results on Thursday.

Apollo reported an 86 percent plunge in profit for the fourth quarter from last year, hurt by declines in the value of the company's energy holdings, particularly oil and gas company EP Energy Corp. (EPE), whose shares declined 40 percent during the fourth quarter.

Oil and gas companies have been grappling with lower profits in the latest quarter, reflecting lower production amid a sustained drop in global oil prices. This has also forced these companies to calibrate production plans.

Net income attributable to Apollo Global Management for the fourth quarter was $22.18 million or $0.04 per Class A share, down from $159.16 million or $0.93 per Class A share in the year-ago period.

Economic net income or ENI after taxes, a profit measure that excludes unrealized investment gains or losses. fell to $93.8 million from $444 million in the year-ago period. The decline was driven by lower Business Incentive ENI, partially offset by an increase in Management Business ENI.

On a per share basis, ENI declined to $0.23 from $1.12 in the prior-year quarter and fell short of analysts' estimates.

Total revenues for the quarter declined 65 percent to $275.40 million from $795.15 million in the year-ago period,

The decline in revenues were primarily due to a $531.8 million decrease in Incentive Business revenues, reflecting a 99 percent decline in carried interest income from affiliates.

Apollo's Incentive Business reported total carried interest loss of $5 million for the quarter, compared to total carrier interest income of $526.8 million in the year-ago period.

During the quarter, the Incentive Business generated $518.4 million of realized gains, reflecting the sales of a number of investments held by funds managed by Apollo, including Athlon Energy, Inc., Taminco Corp., and Prestige Cruise Holdings, Inc. These helped to partly offset the decline in the value of Apollo's energy holdings.

In addition, the company's private equity, real estate and credit segments reported lower economic net income for the quarter.

For fiscal 2014, net income attributable to the company was $168.23 million or $0.62 per Class A share, down from $659.39 million or $4.03 per Class A share last year. ENI after taxes were $1.42 per share, compared to $5.02 per share in the previous year.

Total revenue for the year decreased 58 percent from last year to $1.56 billion from $3.73 billion last year.

Apollo's total assets under management or AUM was $159.8 billion as of December 31, 2014, down 1 percent from $161.2 billion at the end of the year-ago period.

Apollo Global Management declared a fourth-quarter 2014 cash distribution of $0.86 per Class A share. This distribution will be paid on February 27, 2015 to holders of record at the close of business on February 17, 2015.

APO is trading at $24.23, down $0.32 or 1.30 percent on a volume of 186,721 shares.