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Aimia reports first-quarter loss of $16.3M; ups quarterly dividend 5.9%

MONTREAL - Travel rewards company Aimia Inc. (TSX:AIM) is increasing its dividend almost six per cent despite swinging to a loss in the first quarter on revenue that was relatively flat year over year.

Aimia, which owns and operates the Aeroplan rewards program in Canada and operates or has stakes in other such programs around the world, reported after markets closed Tuesday that it had a net loss of $16.3 million or 13 cents per share in the quarter.

That was a reversal of its results a year ago when it posted a first-quarter profit of $45.7 million or 22 cents per share.

Total revenue for the three months ended March 31 slumped slightly to $608.9 million from $609.5 million in the same 2013 period.

Despite the net loss, Aimia reported higher gross billings and an increase in adjusted earnings and said it was increasing its quarterly dividend a penny, or 5.9 per cent, to 18 cents per share "in line with annual policy."

Adjusted net earnings were 48 cents, well above analyst expectations of 34 cents, according to a survey by Thomson Reuters.

Meanwhile, the Montreal-based company touted its new alliance with TD Bank (TSX:TD), which replaced CIBC (TSX:CM) as its main partner this year. Prior to the switch, CIBC had been the main issuer of Aeroplan credit cards for more than 20 years.

"Our partnership with TD has resulted in a successful launch and we are seeing strong momentum in both our TD and AMEX relationships thanks to the refresh of the Aeroplan program," CEO Rupert Duchesne said.

"Aeroplan members' activity levels suggest that the changes we made to the program were the right ones and are delivering value to them, with rewards issued up nine per cent in the quarter."

The company said the Aeroplan transformation had exceeded expectations, with TD enrolling around 275,000 new cardholders "representing a 50 per cent increase over the credit card portfolio conveyed from CIBC in only a few months."

Besides Aeroplan, Aimia also owns and operates Nectar, the United Kingdom's largest coalition loyalty program; Nectar Italia, Italy's largest coalition loyalty program, and Smart Button, a leading provider of SaaS loyalty solutions. In addition, it has stakes in Air Miles Middle East, Travel Club, Spain's leading coalition loyalty program; Club Premier, Mexico's leading coalition loyalty program; China Rewards and others.

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