Brookfield Business Partners Reports Third Quarter 2024 Results
BROOKFIELD, News, Nov. 08, 2024 (GLOBE NEWSWIRE) -- Brookfield Business Partners (NYSE:BBU, BBUC, TSX:BBU, BBUC)) announced today financial results for the quarter ended September 30, 2024.
"We had a good quarter, achieving solid financial results and generating over $350 million of proceeds from distributions and announced monetizations, including the sale of a significant portion of our offshore oil services operation," said Anuj Ranjan, CEO of Brookfield Business Partners. "The progress we are making on our capital recycling initiatives will provide us significant liquidity to support our growth and with interest rates normalizing, we are in a great position to continue compounding value for investors."
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
US$ millions (except per unit amounts), unaudited
2024
2023
2024
2023
Net income (loss) attributable to Unitholders1
$
301
$
(44
)
$
329
$
(18
)
Net income (loss) per limited partnership unit2
$
1.39
$
(0.20
)
$
1.52
$
(0.08
)
Adjusted EBITDA3
$
844
$
655
$
1,912
$
1,883
Net income attributable to Unitholders for the three months ended September 30, 2024 was $301 million ($1.39 income per limited partnership unit) compared to net loss of $44 million ($0.20 loss per limited partnership unit) in the prior period.
Adjusted EBITDA for the three months ended September 30, 2024 was $844 million compared to $655 million in the prior period. Current period results included a benefit at our advanced energy storage operation which the business is entitled to claim under the U.S. Inflation Reduction Act (U.S. IRA), and the applicable regulations which were finalized in October 2024. Prior period results included $108 million of contribution from our nuclear technology services operation and other disposed operations.
Operational Update
The following table presents Adjusted EBITDA by segment:
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
US$ millions, unaudited
2024
2023
2024
2023
Industrials
$
500
$
218
$
941
$
633
Business Services
228
238
615
673
Infrastructure Services
146
228
446
669
Corporate and Other
(30
)
(29
)
(90
)
(92
)
Adjusted EBITDA
$
844
$
655
$
1,912
$
1,883
Our Industrials segment generated Adjusted EBITDA of $500 million for the three months ended September 30, 2024, compared to $218 million during the same period in 2023. Current period results included a $296 million U.S. IRA benefit at our advanced energy storage operation which was recorded as a reduction to direct operating costs for the twelve months ended September 30, 2024. Growing contribution from our water and wastewater services operation also benefited results during the quarter, offset by reduced performance at engineered components manufacturing due to softness in end markets. Prior period results included contribution from disposed operations including our Canadian aggregates production operation which was sold in June 2024.
Our Business Services segment generated Adjusted EBITDA of $228 million for the three months ended September 30, 2024, compared to $238 million during the same period in 2023. Performance was impacted by reduced contribution from our dealer software and technology services operation primarily due to higher costs in the business related to technology upgrades. Prior period results included contribution from our road fuels operation which was sold in July 2024.
Our Infrastructure Services segment generated Adjusted EBITDA of $146 million for the three months ended September 30, 2024, compared to $228 million during the same period in 2023. Prior period results included $77 million of contribution from our nuclear technology services operation which was sold in November 2023. Current period results benefited from strong performance at offshore oil services which was offset by reduced contribution from work access services.
The following table presents Adjusted EFO4 by segment:
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
US$ millions, unaudited
2024
2023
2024
2023
Adjusted EFO
Industrials
$
356
$
152
$
742
$
377
Business Services
245
123
499
455
Infrastructure Services
61
106
209
280
Corporate and Other
(80
)
(93
)
(248
)
(258
)
Adjusted EFO for the three months ended September 30, 2024 reflected increased contribution from our Industrials and Business Services segments. Infrastructure Services Adjusted EFO reflected the disposition of our nuclear technology services operation which was sold last year. Adjusted EFO in the current period included $131 million of net gains primarily related to the disposition of our road fuels operation and the deconsolidation of our payment processing services operation in our Business Services segment. Adjusted EFO in the prior period included $70 million of net gains primarily related to the disposition of our automotive aftermarket parts remanufacturing operation and public securities.
Strategic Initiatives
Offshore Oil ServicesEarlier this week, our offshore oil services operation agreed to sell its shuttle tanker segment for total consideration of approximately $1.9 billion. Proceeds from the sale of BBU's interest are expected to be approximately $265 million after the repayment of debt. The sale is expected to close in the first half of 2025, subject to customary closing conditions and regulatory approval.
Payment Processing ServicesIn September, we completed the acquisition of Network International, a leading digital payment processor in the Middle East and Africa. Following the acquisition, we combined the business with our existing payment processing services operation. BBU invested an incremental $156 million for an 11% economic interest in the combined business alongside new strategic partners.
Unit Repurchase ProgramDuring the quarter, Brookfield Corporation, the parent company of Brookfield Business Partners, purchased 428,511 units of Brookfield Business Partners L.P. As an affiliate, Brookfield Corporation's unit purchases were completed under our normal course issuer bid (NCIB).
Liquidity
We ended the quarter with approximately $1.5 billion of liquidity at the corporate level including $72 million of cash and liquid securities, $25 million of remaining preferred equity commitment from Brookfield Corporation and approximately $1.4 billion of availability on our corporate credit facilities. Pro forma for announced and recently closed transactions, corporate liquidity is $1.6 billion.
Distribution
The Board of Directors has declared a quarterly distribution in the amount of $0.0625 per unit, payable on December 31, 2024 to unitholders of record as at the close of business on November 29, 2024.
Additional Information
The Board has reviewed and approved this news release, including the summarized unaudited interim consolidated financial statements contained herein.
Brookfield Business Partners' Letter to Unitholders and the Supplemental Information are available on our website https://bbu.brookfield.com under Reports & Filings.
Notes:
Attributable to limited partnership unitholders, general partnership unitholders, redemption-exchange unitholders, special limited partnership unitholders and BBUC exchangeable shareholders.
Net income (loss) per limited partnership unit calculated as net income (loss) attributable to limited partners divided by the average number of limited partnership units outstanding for the three and nine months ended September 30, 2024 which were 74.3 million and 74.3 million, respectively (September 30, 2023: 74.6 million and 74.6 million, respectively).
Adjusted EBITDA is a non-IFRS measure of operating performance presented as net income and equity accounted income at the partnership's economic ownership interest in consolidated subsidiaries and equity accounted investments, respectively, excluding the impact of interest income (expense), net, income taxes, depreciation and amortization expense, gains (losses) on acquisitions/dispositions, net, transaction costs, restructuring charges, revaluation gains or losses, impairment expenses or reversals, other income or expenses, and preferred equity distributions. The partnership's economic ownership interest in consolidated subsidiaries and equity accounted investments excludes amounts attributable to non-controlling interests consistent with how the partnership determines net income attributable to non-controlling interests in its unaudited interim condensed consolidated statements of operating results. The partnership believes that Adjusted EBITDA provides a comprehensive understanding of the ability of its businesses to generate recurring earnings which allows users to better understand and evaluate the underlying financial performance of the partnership's operations and excludes items that the partnership believes do not directly relate to revenue earning activities and are not normal, recurring items necessary for business operations. Please refer to the reconciliation of net income (loss) to Adjusted EBITDA included in this news release.
Adjusted EFO is the partnership's segment measure of profit or loss and is presented as net income and equity accounted income at the partnership's economic ownership interest in consolidated subsidiaries and equity accounted investments, respectively, excluding the impact of depreciation and amortization expense, deferred income taxes, transaction costs, restructuring charges, unrealized revaluation gains or losses, impairment expenses or reversals and other income or expense items that are not directly related to revenue generating activities. The partnership's economic ownership interest in consolidated subsidiaries excludes amounts attributable to non-controlling interests consistent with how the partnership determines net income attributable to non-controlling interests in its unaudited interim condensed consolidated statements of operating results. In order to provide additional insight regarding the partnership's operating performance over the lifecycle of an investment, Adjusted EFO includes the impact of preferred equity distributions and realized disposition gains or losses recorded in net income, other comprehensive income, or directly in equity, such as ownership changes. Adjusted EFO does not include legal and other provisions that may occur from time to time in the partnership's operations and that are one-time or non-recurring and not directly tied to the partnership's operations, such as those for litigation or contingencies. Adjusted EFO includes expected credit losses and bad debt allowances recorded in the normal course of the partnership's operations. Adjusted EFO allows the partnership to evaluate its segments on the basis of return on invested capital generated by its operations and allows the partnership to evaluate the performance of its segments on a levered basis.
Brookfield Business Partners is a global business services and industrials company focused on owning and operating high-quality businesses that provide essential products and services and benefit from a strong competitive position. Investors have flexibility to invest in our company either through Brookfield Business Partners L.P. (NYSE:BBU, TSX:BBU), a limited partnership or Brookfield Business Corporation ((NYSE, TSX:BBUC), a corporation. For more information, please visit https://bbu.brookfield.com.
Brookfield Business Partners is the flagship listed vehicle of Brookfield Asset Management's Private Equity Group. Brookfield Asset Management is a leading global alternative asset manager with over $1 trillion of assets under management.
Please note that Brookfield Business Partners' previous audited annual and unaudited quarterly reports have been filed on SEDAR+ and EDGAR, and are available at https://bbu.brookfield.com under Reports & Filings. Hard copies of the annual and quarterly reports can be obtained free of charge upon request.
For more information, please contact:
Media:Marie FullerTel: +44 207 408 8375Email:
Investors:Alan FlemingTel: +1 (416) 645-2736Email:
Conference Call and Quarterly Earnings Webcast Details
Investors, analysts and other interested parties can access Brookfield Business Partners' third quarter 2024 results as well as the Letter to Unitholders and Supplemental Information on our website https://bbu.brookfield.com under Reports & Filings.
The results call can be accessed via webcast on November 8, 2024 at 10:00 a.m. Eastern Time at BBU2024Q3Webcast or participants can preregister at BBU2024Q3ConferenceCall. Upon registering, participants will be emailed a dial-in number, direct passcode, and unique PIN. A replay of the webcast will be available at https://bbu.brookfield.com.
Brookfield Business Partners L.P.Consolidated Statements of Financial Position
As at
US$ millions, unaudited
September 30, 2024
December 31, 2023
Assets
Cash and cash equivalents
$
3,003
$
3,252
Financial assets
13,384
13,176
Accounts and other receivable, net
6,480
6,563
Inventory and other assets
4,715
5,321
Property, plant and equipment
15,527
15,724
Deferred income tax assets
1,909
1,220
Intangible assets
19,334
20,846
Equity accounted investments
2,364
2,154
Goodwill
13,540
14,129
Total Assets
$
80,256
$
82,385
Liabilities and Equity
Liabilities
Corporate borrowings
$
1,978
$
1,440
Accounts payable and other
16,460
18,378
Non-recourse borrowings in subsidiaries of Brookfield Business Partners
39,571
40,809
Deferred income tax liabilities
2,886
3,226
Equity
Limited partners
$
1,980
$
1,909
Non-controlling interests attributable to:
Redemption-exchange units
1,858
1,792
Special limited partner
—
—
BBUC exchangeable shares
1,945
1,875
Preferred securities
740
740
Interest of others in operating subsidiaries
12,838
12,216
19,361
18,532
Total Liabilities and Equity
$
80,256
$
82,385
Brookfield Business Partners L.P.Consolidated Statements of Operating Results
US$ millions, unaudited
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2024
2023
2024
2023
Revenues
$
9,232
$
14,399
$
33,193
$
41,663
Direct operating costs
(7,069
)
(13,016
)
(28,875
)
(37,812
)
General and administrative expenses
(319
)
(403
)
(943
)
(1,202
)
Interest income (expense), net
(778
)
(941
)
(2,352
)
(2,738
)
Equity accounted income (loss)
1
31
55
84
Impairment reversal (expense), net
—
(44
)
