BBUC - Brookfield Business Partners Reports Third Quarter 2023 Results | Benzinga

BROOKFIELD, NEWS, Nov. 03, 2023 (GLOBE NEWSWIRE) -- Brookfield Business Partners (NYSE:BBUC, BBU, TSX:BBUC, BBU.UN)) announced today financial results for the quarter ended September 30, 2023.

"We had a strong third quarter and are pleased with our results," said Cyrus Madon, CEO of Brookfield Business Partners. "We generated record quarterly Adjusted EBITDA and reached an agreement to sell an interest in Everise, our technology services operation, at a valuation of 3.5x our original investment. Our focus is on progressing initiatives to support our growth, including the sale of Westinghouse which we expect to close imminently."

Net loss attributable to unitholders for the three months ended September 30, 2023 was $44 million ($0.20 loss per limited partnership unit) compared to net loss of $41 million ($0.18 loss per limited partnership unit) in the prior period.

Adjusted EBITDA for the three months ended September 30, 2023 was $655 million compared to $611 million in the prior period, reflecting increased contribution from our Business Services and Infrastructure Services segments.

Operational Update

The following table presents Adjusted EBITDA by segment:

Our Business Services segment generated Adjusted EBITDA of $238 million for the three months ended September 30, 2023, compared to $213 million for the same period in 2022. Results benefited from increased contribution from our residential mortgage insurer and our dealer software and technology services operation. Current period results included contribution from our rental car services operation which we acquired in October 2022.

Our Infrastructure Services segment generated Adjusted EBITDA of $228 million for the three months ended September 30, 2023, compared to $205 million during the same period in 2022. Increased contribution from modular building leasing services and improved performance at work access services was partially offset by the impact of reduced ownership at our lottery services operation.

Our Industrials segment generated Adjusted EBITDA of $218 million for the three months ended September 30, 2023, compared to $228 million during the same period in 2022. Strong performance at our advanced energy storage operation was offset by reduced contribution from graphite electrode operations and our Western Canadian energy related operations.

The following table presents Adjusted EFO⁴ by segment:

Adjusted EFO for the three months ended September 30, 2023 reflected increased contribution from our Industrials and Infrastructure Services segments offset by the impact of higher current tax in our Business Services segment and higher interest expense. Adjusted EFO in the current period included $70 million of net gains primarily related to the sale of the majority of our automotive aftermarket parts remanufacturing operation and public securities.

Strategic Initiatives

• Technology Services Operation
  In October 2023 we reached an agreement to sell a portion of our interest in our technology services operation at a valuation of approximately 3.5x what we paid for the business just over two years ago. Our share of proceeds from the sale is expected to be approximately $120 million, representing an approximate 2x realized multiple on our investment and we will continue to hold a 17% ownership interest in the business. The transaction is expected to close in the first quarter of 2024.

• Unit Repurchase Program
  For the three months ended September 30, 2023 we repurchased 54,264 of Brookfield Business Partners L.P. units under our normal course issuer bid (NCIB).

Liquidity

We ended the quarter with approximately $1.4 billion of liquidity at the corporate level including $133 million of cash and liquid securities and $1.3 billion of availability on our term credit facilities.

Distribution

The Board of Directors has declared a quarterly distribution in the amount of $0.0625 per unit, payable on December 29, 2023 to unitholders of record as at the close of business on November 30, 2023.

Additional Information

The Board has reviewed and approved this news release, including the summarized unaudited 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:

1. Attributable to limited partnership unitholders, general partnership unitholders, redemption-exchange unitholders, special limited partnership unitholders and BBUC exchangeable shareholders.
2. 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, 2023 which were 74.6 million and 74.6 million, respectively (September 30, 2022: 74.6 million and 75.5 million, respectively).
3. 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 elsewhere in this release.
4. 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.
5. On January 1, 2023, our residential mortgage insurer adopted a new accounting standard, IFRS 17. Our comparative period information has been adjusted to present the results of our residential mortgage insurer measured in accordance with IFRS 17. The new IFRS 17 accounting standard has no impact on the fundamental economics or cash flows of the business. Total earnings recognized over the duration of an insurance contract are unchanged, however the timing of revenues and earnings is impacted by the new IFRS 17 measurement model. Compared to the previous accounting standard, the recognition of revenue in accordance with IFRS 17 has more sensitivity to changes in macroeconomic variables and will generally be slower except in periods of rapidly increasing home prices. Losses on claims will be largely unchanged with the adoption of IFRS 17, but loss ratios will be higher during periods of slower revenue recognition in accordance with IFRS 17.
   

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 Corporation ((NYSE, TSX:BBUC), a corporation, or Brookfield Business Partners L.P. (NYSE:BBU, TSX:BBU), a limited partnership. 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 $850 billion 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:

Conference Call and Quarterly Earnings Webcast Details

Investors, analysts and other interested parties can access Brookfield Business Partners' third quarter 2023 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 3, 2023 at 9:30 a.m. Eastern Time at BBU2023Q3Webcast or participants can preregister at BBU2023Q3ConferenceCall. 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

Notes:

1. Comparative prior period results have been adjusted in accordance with the new IFRS 17 accounting standard adopted at our residential mortgage insurer on January 1, 2023.
   
   

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

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