Brookfield Business Partners (BBU) Q2 2024 earnings summary

Executive summary

• Net loss attributable to unitholders for Q2 2024 was $20 million ($0.10 per unit), an improvement from a $48 million loss ($0.22 per unit) in Q2 2023, with results impacted by one-time events including a cybersecurity incident and project-related costs.

• Adjusted EBITDA for Q2 2024 was $524 million, down from $606 million in Q2 2023, mainly due to lower contributions from Infrastructure and Business Services after asset sales and one-time impacts.

• Adjusted EFO rose to $289 million ($1.33 per unit) from $185 million ($0.85 per unit) in Q2 2023, driven by gains on asset dispositions and public securities sales.

• Strong performance in advanced energy storage and offshore oil services was partially offset by lower volumes in engineered components and costs from a cybersecurity incident.

• Corporate liquidity stood at $1.6 billion at quarter-end, with no significant near-term debt maturities.

Financial highlights

• Q2 2024 revenues were $11.95 billion, down from $13.51 billion in Q2 2023, reflecting business dispositions.

• Adjusted EBITDA margin was 19%, consistent with the prior year.

• Interest expense, net, decreased by $70 million year-over-year due to lower borrowings and refinancing.

• Total assets as of June 30, 2024, were $81,521 million, with total equity of $18,204 million.

• Cash and cash equivalents at quarter-end were $2.96 billion.

Outlook and guidance

• Management expects earnings to improve as one-time items subside and continues to focus on value creation, capital recycling, and operational improvements.

• Expectation that one-time impacts from the CDK cyber incident and construction delays will not recur in future quarters.

• Anticipation of market recovery in certain segments, such as DexKo, through late 2024 and into 2025.

• Ongoing evaluation of monetization options for key assets, including IPOs and strategic sales.

• Ongoing optimization and cost reduction initiatives are underway in several segments.