Brookfield Business Partners Reports First Quarter 2021 Results

by akoloy


BROOKFIELD, News, May 05, 2021 (GLOBE NEWSWIRE) — Brookfield Business Partners L.P. (NYSE: BBU) (TSX: BBU.UN) (“Brookfield Business Partners”) introduced monetary outcomes for the quarter ended March 31, 2021.

“We generated strong performance to start the year and our businesses are benefiting from the continued recovery in conditions as global economies reopen,” mentioned Cyrus Madon, CEO of Brookfield Business Partners. “We completed the privatization of Sagen and advanced several capital recycling initiatives during the quarter which position us well for growth this year.”

Three Months Ended
March 31,
US$ hundreds of thousands (besides per unit quantities) unaudited 2021 2020
Net revenue (loss) attributable to unitholders1 $ 530 $ (126 )
Net revenue (loss) per restricted partnership unit2 $ 3.57 $ (0.84 )
Company EBITDA1,4 $ 387 $ 294
Company FFO1,3 $ 545 $ 194
Company FFO per unit2 $ 3.67 $ 1.29
Company FFO, excluding achieve (loss), internet on acquisitions/tendencies1,3 $ 217 $ 152
Company FFO, excluding achieve (loss), internet on acquisitions/tendencies per unit2 $ 1.46 $ 1.01

Brookfield Business Partners generated Company EBITDA of $387 million for the three months ended March 31, 2021 in comparison with $294 million for the three months ended March 31, 2020 reflecting elevated EBITDA in our Business Services and Industrials segments, partially offset by decreased contribution from our Infrastructure Services phase. For the three months ended March 31, 2021 Company FFO was $217 million ($1.46 per unit) in comparison with $152 million ($1.01 per unit) within the prior yr on a comparable foundation excluding the good thing about features on tendencies.

Net revenue attributable to unitholders for the three months ended March 31, 2021 was $530 million ($3.57 per unit) in comparison with internet lack of $126 million (lack of $0.84 per unit) within the prior yr. Net revenue included features generated from our decreased GrafTech curiosity, partially offset by prices recorded at Clarios primarily associated to the closure of one in every of its North American recycling amenities and continued optimization of its U.S. operations.

Operational Update

The following desk presents Company EBITDA by phase:

Three Months Ended
March 31,
US$ hundreds of thousands, unaudited 2021 2020
Business Services $ 104 $ 19
Infrastructure Services 136 156
Industrials 172 145
Corporate and Other (25 ) (26 )
Company EBITDA1,4 $ 387 $ 294

Our Business Services phase generated Company EBITDA of $104 million through the three months ended March 31, 2021, in comparison with $19 million in the identical interval in 2020. Results benefited from improved enterprise circumstances broadly, and normalized efficiency at our development operations.

Our Infrastructure Services phase generated Company EBITDA of $136 million through the three months ended March 31, 2021, in comparison with $156 million in the identical interval in 2020. Results benefited from the complete quarter contribution of BrandSafway which we acquired on the finish of January 2020, offset by decreased contribution from Altera Infrastructure. In addition, efficiency at Westinghouse mirrored regular seasonality aligned with the deliberate timing of buyer outage cycles and gas meeting shipments which had been decrease than prior yr.

Our Industrials phase generated Company EBITDA of $172 million through the three months ended March 31, 2021 in comparison with $145 million in the identical interval in 2020. Increased contribution from Clarios was partially offset by decreased contribution from GrafTech as a consequence of our decreased possession and decrease realized gross sales costs of graphite electrodes.

The following desk presents Company FFO by phase:

Three Months Ended
March 31,
US$ hundreds of thousands (besides per unit quantities), unaudited 2021 2020
Business Services $ 70 $ 42
Infrastructure Services 73 104
Industrials 421 57
Corporate and Other (19 ) (9 )
Company FFO1,3 $ 545 $ 194
Gain (loss) on acquisitions/tendencies, internet 328 42
Company FFO, excluding achieve (loss), internet on acquisitions/tendencies1,3 217 152
Company FFO, excluding achieve (loss), internet on acquisitions/tendencies per unit2 $ 1.46 $ 1.01

Company FFO for the three months ended March 31, 2021 elevated to $545 million from $194 million in the identical interval in 2020. Company FFO included a $133 million after-tax achieve on the sale of public safety investments and a $195 million after-tax achieve on the sale of GrafTech widespread shares through the quarter. Company FFO for the primary quarter 2020 included an after-tax achieve of $42 million on the sale of our chilly storage logistics enterprise.

Liquidity

We ended the quarter with roughly $2.4 billion of liquidity on the company degree together with $389 million of money and liquid securities and $2.1 billion of availability on our credit score amenities.

Strategic Initiatives

  • Sagen MI Canada Subsequent to the top of the quarter, along with institutional companions, we accomplished the privatization of Sagen. Sagen raised roughly $750 million of financing as a part of our privatization transaction. As a outcome, Brookfield Business Partners invested roughly $185 million for its share of the funding which elevated our possession curiosity in Sagen to roughly 40%.
  • Investment in Public Securities In early 2020, along with institutional companions, we invested roughly $600 million within the fairness of public securities. The appreciation within the worth of our funding represents a complete pre-tax achieve of roughly $940 million, of which roughly $330 million is attributable to Brookfield Business Partners and through the quarter we bought a good portion of those securities. Brookfield Business Partners’ share of the after-tax internet proceeds from the securities bought was $133 million.
  • GrafTech International (GrafTech) During the quarter, along with institutional companions, we bought 50 million widespread shares of GrafTech to advance the continued monetization of our funding for proceeds of roughly $565 million. Brookfield Business Partners’ share of the after-tax internet proceeds was roughly $170 million.
  • Unit Repurchase Program For the three months ended March 31, 2021 we repurchased 363,102 of Brookfield Business Partners’ models below our regular course issuer bid (NCIB).

Distribution

The Board of Directors has declared a quarterly distribution within the quantity of $0.0625 per unit, payable on June 30, 2021 to unitholders of file as on the shut of enterprise on May 28, 2021.

Additional Information

The Board has reviewed and accepted this information launch, together with the summarized unaudited consolidated monetary statements contained herein.

Brookfield Business Partners’ Letter to Unitholders and the Supplemental Information can be found at https://bbu.brookfield.com/reports-and-filings.

Notes:

  1. Attributable to restricted partnership unitholders, normal partnership unitholders, particular restricted partnership unitholders and redemption-exchange unitholders.
  2. Average variety of partnership models excellent on a totally diluted time weighted common foundation, assuming the change of redemption-exchange models held by Brookfield Asset Management for restricted partnership models, for the three months ended March 31, 2021 was 148.5 million (2020: 150.6 million).
  3. Company FFO is offered as a internet quantity attributable to unitholders and is a non-IFRS measure and is calculated as our share of internet revenue and fairness accounted revenue excluding the affect of depreciation and amortization, deferred revenue taxes, transaction prices, non-cash valuation features or losses, impairment expense and different gadgets. In order to offer further perception concerning efficiency on a cumulative realized foundation, Company FFO consists of realized disposition features or losses, together with related tax impacts, recorded in internet revenue, different complete revenue, or instantly in fairness, resembling possession modifications. These embrace features or losses arising from transactions through the reported interval along with honest worth modifications recorded in prior durations. A reconciliation of internet revenue to Company FFO is offered on pages 8-10 of this launch.
  4. Company EBITDA is offered as a internet quantity attributable to unitholders and is a non-IFRS measure and is calculated as Company FFO excluding the affect of our share of realized disposition features and losses, curiosity revenue and expense, and present revenue taxes. A reconciliation of internet revenue to Company EBITDA is offered on pages 8-10 of this launch.

Brookfield Business Partners is a enterprise companies and industrials firm targeted on proudly owning and working high-quality companies that profit from obstacles to entry and/or low manufacturing prices.

Brookfield Business Partners is the flagship listed enterprise companies and industrials firm of Brookfield Asset Management, a number one world different asset supervisor with over $600 billion of property below administration. More info is offered at www.brookfield.com.

Brookfield Business Partners is listed on the New York and Toronto inventory exchanges. For extra info, please go to our web site at https://bbu.brookfield.com.

Please be aware that Brookfield Business Partners’ earlier audited annual and unaudited quarterly reviews have been filed on SEDAR and Edgar, and can be found at https://bbu.brookfield.com/reports-and-filings. Hard copies of the annual and quarterly reviews will be obtained freed from cost upon request.

For extra info, please contact:

Conference Call and Quarterly Earnings Webcast Details

Investors, analysts and different events can entry Brookfield Business Partners’ first quarter 2021 outcomes in addition to the Letter to Unitholders and Supplemental Information on our web site below the Reports & Filings part at https://bbu.brookfield.com

The convention name will be accessed through webcast on May 5, 2021 at 11:00 a.m. Eastern Time at https://bbu.brookfield.com or through teleconference at +1 (866) 688-9431 toll free within the U.S. and Canada. For abroad calls please dial +1 (409) 216-0818, at roughly 10:50 a.m. Eastern Time. The Conference ID is 1596494. A recording of the convention name will probably be obtainable till May 11, 2021 by dialing +1 (855) 859-2056 toll-free within the U.S. and Canada or +1 (404) 537-3406 for abroad calls (Conference ID 1596494). A replay of the webcast will probably be obtainable at https://bbu.brookfield.com.

Cautionary Statement Regarding Forward-looking Statements and Information

Note: This information launch incorporates “forward-looking information” inside the which means of Canadian provincial securities legal guidelines and “forward-looking statements” inside the which means of Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the U.S. Securities Exchange Act of 1934, as amended, “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and in any relevant Canadian securities rules. Forward-looking statements embrace statements which can be predictive in nature, rely upon or consult with future occasions or circumstances, embrace statements concerning the operations, enterprise, monetary situation, anticipated monetary outcomes, efficiency, prospects, alternatives, priorities, targets, targets, ongoing targets, methods and outlook of Brookfield Business Partners, in addition to the outlook for North American and worldwide economies for the present fiscal yr and subsequent durations, and embrace phrases resembling “expects,” “anticipates,” “plans,” “believes,” “estimates,” “seeks,” “intends,” “targets,” “projects,” “forecasts” or damaging variations thereof and different related expressions, or future or conditional verbs resembling “may,” “will,” “should,” “would” and “could.”

Although we consider that our anticipated future outcomes, efficiency or achievements expressed or implied by the forward-looking statements and data are primarily based upon cheap assumptions and expectations, the reader shouldn’t place undue reliance on forward-looking statements and data as a result of they contain recognized and unknown dangers, uncertainties and different components, lots of that are past our management, which can trigger the precise outcomes, efficiency or achievements of Brookfield Business Partners to vary materially from anticipated future outcomes, efficiency or achievement expressed or implied by such forward-looking statements and data.

Factors that might trigger precise outcomes to vary materially from these contemplated or implied by forward-looking statements embrace, however should not restricted to: the affect or unanticipated affect of normal financial, political and market components within the nations wherein we do enterprise; together with on account of the continued novel coronavirus pandemic (“COVID-19”); the habits of economic markets, together with fluctuations in curiosity and overseas change charges; world fairness and capital markets and the provision of fairness and debt financing and refinancing inside these markets; strategic actions together with tendencies; the flexibility to finish and successfully combine acquisitions into current operations and the flexibility to achieve anticipated advantages; modifications in accounting insurance policies and strategies used to report monetary situation (together with uncertainties related to essential accounting assumptions and estimates); the flexibility to appropriately handle human capital; the impact of making use of future accounting modifications; enterprise competitors; operational and reputational dangers; technological change; modifications in authorities regulation and laws inside the nations wherein we function; governmental investigations; litigation; modifications in tax legal guidelines; capability to gather quantities owed; catastrophic occasions, resembling earthquakes; hurricanes and pandemics/epidemics; the attainable affect of worldwide conflicts and different developments together with terrorist acts and cyber terrorism; and different dangers and components detailed occasionally in our paperwork filed with the securities regulators in Canada and the United States.

In addition, our future outcomes could also be impacted by the federal government mandated financial restrictions ensuing from the continued COVID-19 pandemic and the associated world discount in commerce and journey and substantial volatility in inventory markets worldwide, which can negatively affect our revenues, have an effect on our capability to establish and full future transactions, affect our liquidity place and lead to a lower of money flows and impairment losses and/or revaluations on our investments and property, and subsequently we could also be unable to realize our anticipated returns. See “Risks Associated with the COVID-19 Pandemic” within the “Risks Factors” part included in our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 20-F for the yr ended December 31, 2020.

We warning that the foregoing listing of necessary components which will have an effect on future outcomes shouldn’t be exhaustive. When counting on our forward-looking statements, traders and others ought to rigorously take into account the foregoing components and different uncertainties and potential occasions. Except as required by legislation, Brookfield Business Partners undertakes no obligation to publicly replace or revise any forward-looking statements or info, whether or not written or oral, which may be on account of new info, future occasions or in any other case.

Cautionary Statement Regarding the Use of Non-IFRS Measures

This information launch incorporates references to Non-IFRS Measures. When figuring out Company FFO and Company EBITDA, we embrace our unitholders’ share of Company FFO and Company EBITDA for fairness accounted investments. Company FFO and Company EBITDA should not typically accepted accounting measures below IFRS and subsequently might differ from definitions utilized by different entities. We consider these metrics are helpful supplemental measures which will help traders in assessing the monetary efficiency of Brookfield Business Partners and its subsidiaries. However, Company FFO and Company EBITDA shouldn’t be thought of in isolation from, or as substitutes for, evaluation of our monetary statements ready in accordance with IFRS.

References to Brookfield Business Partners are to Brookfield Business Partners L.P. along with its subsidiaries, managed associates and working entities. Brookfield Business Partners’ outcomes embrace publicly held restricted partnership models, redemption-exchange models, normal partnership models and particular restricted partnership models. More detailed info on sure references made on this information launch will probably be obtainable in our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 6-Ok for the primary quarter ended March 31, 2021.

Brookfield Business Partners L.P.
Consolidated Statements of Financial Position

As at
US$ hundreds of thousands, unaudited March 31, 2021 December 31, 2020
Assets
Cash and money equivalents $ 2,637 $ 2,743
Financial property 9,761 8,796
Accounts and different receivable, internet 5,158 4,989
Inventory and different property 5,569 5,280
Property, plant and gear 13,066 13,982
Deferred revenue tax property 713 761
Intangible property 10,803 11,261
Equity accounted investments 1,725 1,690
Goodwill 5,273 5,244
Total Assets $ 54,705 $ 54,746
Liabilities and Equity
Liabilities
Corporate borrowings $ 515 $ 610
Accounts payable and different 17,663 17,932
Non-recourse borrowings in subsidiaries of Brookfield Business Partners 22,159 23,166
Deferred revenue tax liabilities 1,567 1,701
$ 41,904 $ 43,409
Equity
Limited companions $ 2,141 $ 1,928
Non-Controlling pursuits attributable to:
Redemption-Exchange Units, Preferred Shares and Special
Limited Partnership Units held by Brookfield Asset Management Inc.
1,913 1,564
Interest of others in working subsidiaries 8,747 7,845
12,801 11,337
Total Liabilities and Equity $ 54,705 $ 54,746

Brookfield Business Partners L.P.
Consolidated Statements of Operating Results

US$ hundreds of thousands, unaudited Three Months Ended
March 31,
2021 2020
Revenues $ 9,829 $ 10,146
Direct working prices (8,436 ) (8,901 )
General and administrative bills (251 ) (244 )
Depreciation and amortization expense (542 ) (538 )
Interest revenue (expense), internet (348 ) (364 )
Equity accounted revenue (loss), internet 29 (9 )
Impairment expense, internet (201 ) (113 )
Gain (loss) on acquisitions/tendencies, internet 1,807 183
Other revenue (expense), internet 39 (217 )
Income (loss) earlier than revenue tax 1,926 (57 )
Income tax (expense) restoration
Current (193 ) (75 )
Deferred 34 98
Net revenue (loss) $ 1,767 $ (34 )
Attributable to:
Limited companions $ 281 $ (67 )
Non-controlling pursuits attributable to:
Redemption-Exchange Units held by Brookfield Asset Management Inc. 249 (59 )
Special Limited Partners
Interest of others in working subsidiaries $ 1,237 $ 92

Brookfield Business Partners L.P.
Statements of Company Funds from Operations

For the three months ended
March 31, 2021
US$ hundreds of thousands, unaudited
Business Services
Infrastructure Services
Industrials
Corporate
and Other
Total
Attributable
to Non-
controlling
Interests
As per
IFRS
Financials
Revenues $ 1,922 $ 480 $ 771 $ $ 3,173 $ 6,656 $ 9,829
Direct working prices (1,787 ) (355 ) (596 ) (3 ) (2,741 ) (5,695 ) (8,436 )
General and administrative bills (34 ) (17 ) (23 ) (22 ) (96 ) (155 ) (251 )
Equity accounted Company EBITDA5 3 28 20 51 45 96
Company EBITDA1,3,4 $ 104 $ 136 $ 172 $ (25 ) $ 387
Gain (loss) on acquisitions/tendencies, internet6 402 402 732 1,134
Other revenue (expense), internet7 (2 ) (1 ) (3 ) (10 ) (13 )
Interest revenue (expense), internet (12 ) (39 ) (58 ) (4 ) (113 ) (235 ) (348 )
Current revenue tax (expense) restoration8 (18 ) (7 ) (91 ) 10 (106 ) (96 ) (202 )
Realized disposition achieve, present revenue taxes and curiosity expense associated to fairness accounted investments5 (2 ) (16 ) (4 ) (22 ) (7 ) (29 )
Company FFO1,2,4 $ 70 $ 73 $ 421 $ (19 ) $ 545
Depreciation and amortization expense (182 ) (360 ) (542 )
Impairment expense, internet (58 ) (143 ) (201 )
Gain (loss) on acquisitions/tendencies, internet6 223 450 673
Current revenue tax (expense) restoration8 9 9
Other revenue (expense), internet7 25 27 52
Deferred revenue tax (expense) restoration (6 ) 40 34
Non-cash gadgets attributable to fairness accounted investments5 (26 ) (12 ) (38 )
Net revenue (loss)4 $ 530 $ 1,237 $ 1,767

Notes:

  1. The Statements of Company Funds from Operations above are ready on a foundation that’s according to Brookfield Business Partners’ Supplemental Information and differs from internet revenue as offered in Brookfield Business Partners’ Consolidated Statements of Operating Results on web page 7 of this launch, which is ready in accordance with IFRS. Management makes use of Company FFO and Company EBITDA as key measures to judge working efficiency. Readers are inspired to think about all measures in assessing Brookfield Business Partners’ outcomes.
  2. Company FFO is offered as a internet quantity attributable to unitholders and is a non-IFRS measure and is calculated as our share of internet revenue and fairness accounted revenue excluding the affect of depreciation and amortization, deferred revenue taxes, transaction prices, non-cash valuation features or losses, impairment expense and different gadgets. In order to offer further perception concerning efficiency on a cumulative realized foundation, Company FFO consists of realized disposition features or losses, together with related tax impacts, recorded in internet revenue, different complete revenue, or instantly in fairness, resembling possession modifications. These embrace features or losses arising from transactions through the reporting interval along with honest worth modifications recorded in prior durations.
  3. Company EBITDA is offered as a internet quantity attributable to unitholders and is a non-IFRS measure and is calculated as Company FFO excluding our share of realized disposition features and losses, curiosity revenue and expense, and present revenue taxes.
  4. Attributable to restricted partnership unitholders, normal partnership unitholders, particular restricted partnership unitholders and redemption-exchange unitholders.
  5. The sum of those quantities equates to fairness accounted revenue (loss), internet of $29 million as per the unaudited interim condensed consolidated statements of working outcomes.
  6. The sum of those quantities equates to achieve (loss) on acquisitions/tendencies, internet of $1,807 million as per the unaudited interim condensed consolidated statements of working outcomes.
  7. The sum of those quantities equates to different revenue (expense), internet of $39 million as per the unaudited interim condensed consolidated statements of working outcomes.
  8. The sum of those quantities equates to present revenue tax (expense) restoration of $(193) million as per the unaudited interim condensed consolidated statements of working outcomes.

Brookfield Business Partners L.P.
Statements of Company Funds from Operations

For the three months ended
March 31, 2020
US$ hundreds of thousands, unaudited
Business Services
Infrastructure Services
Industrials
Corporate
and Other
Total
Attributable
to Non-
controlling
Interests
As per
IFRS
Financials
Revenues $ 2,012 $ 498 $ 695 $ $ 3,205 $ 6,941 $ 10,146
Direct working prices (1,965 ) (347 ) (528 ) (2 ) (2,842 ) (6,059 ) (8,901 )
General and administrative bills (36 ) (16 ) (29 ) (24 ) (105 ) (139 ) (244 )
Equity accounted Company EBITDA5 8 21 7 36 36 72
Company EBITDA1,3,4 $ 19 $ 156 $ 145 $ (26 ) $ 294
Gain (loss) on acquisitions/tendencies, internet 46 (1 ) 45 138 183
Other revenue (expense), internet6 2 (3 ) (1 ) 1
Interest revenue (expense), internet (15 ) (40 ) (65 ) 6 (114 ) (250 ) (364 )
Current revenue tax (expense) restoration (9 ) (2 ) (21 ) 11 (21 ) (54 ) (75 )
Realized disposition achieve, present revenue taxes and curiosity expense associated to fairness accounted investments5 (1 ) (7 ) (1 ) (9 ) (5 ) (14 )
Company FFO1,2,4 $ 42 $ 104 $ 57 $ (9 ) $ 194
Depreciation and amortization expense (179 ) (359 ) (538 )
Impairment expense, internet (52 ) (61 ) (113 )
Other revenue (expense), internet6 (96 ) (121 ) (217 )
Deferred revenue tax (expense) restoration 47  51  98 
Non-cash gadgets attributable to fairness accounted investments5 (40 ) (27 ) (67 )
Net revenue (loss)4 $ (126 ) $ 92 $ (34 )

Notes:

  1. The Statements of Company Funds from Operations above are ready on a foundation that’s according to Brookfield Business Partners’ Supplemental Information and differs from internet revenue as offered in Brookfield Business Partners’ Consolidated Statements of Operating Results on web page 7 of this launch, which is ready in accordance with IFRS. Management makes use of Company FFO and Company EBITDA as key measures to judge working efficiency. Readers are inspired to think about all measures in assessing Brookfield Business Partners’ outcomes.
  2. Company FFO is offered as a internet quantity attributable to unitholders and is a non-IFRS measure and is calculated as our share of internet revenue and fairness accounted revenue excluding the affect of depreciation and amortization, deferred revenue taxes, transaction prices, non-cash valuation features or losses, impairment expense and different gadgets. In order to offer further perception concerning efficiency on a cumulative realized foundation, Company FFO consists of realized disposition features or losses, together with related tax impacts, recorded in internet revenue, different complete revenue, or instantly in fairness, resembling possession modifications. These embrace features or losses arising from transactions through the reporting interval along with honest worth modifications recorded in prior durations.
  3. Company EBITDA is offered as a internet quantity attributable to unitholders and is a non-IFRS measure and is calculated as Company FFO excluding our share of realized disposition features and losses, curiosity revenue and expense, and present revenue taxes.
  4. Attributable to restricted partnership unitholders, normal partnership unitholders, particular restricted partnership unitholders and redemption-exchange unitholders.
  5. The sum of those quantities equates to fairness accounted revenue (loss), internet of $(9) million as per the unaudited interim condensed consolidated statements of working outcomes.
  6. The sum of those quantities equates to different revenue (expense), internet of $(217) million as per the unaudited interim condensed consolidated statements of working outcomes.

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