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.

• 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.

• Major asset sales included the Canadian aggregates production operation and the road fuels operation, with the latter completed post-quarter end.

• Continued progress on value creation initiatives, monetizing mature operations, and recycling capital to support growth.

Financial highlights

• Q2 2024 revenues were $11.95 billion, down 12% year-over-year, reflecting business dispositions and lower volumes in key segments.

• Adjusted EFO for Q2 2024 was $289 million, up from $185 million in Q2 2023, driven by gains on asset dispositions and public securities sales.

• Interest expense decreased by $154 million in Q2 and $223 million year-to-date, driven by lower borrowings and refinancing.

• Liquidity at quarter-end was approximately $1.6 billion, including $91 million in cash and $1.5 billion in available credit.

• Quarterly distribution declared at $0.0625 per unit, payable September 27, 2024.

Outlook and guidance

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

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

• Anticipate market recovery in certain segments, such as DexKo, towards the end of 2024 and into 2025.

• Encouraged by progress on strategic alternatives for Clarios, including IPO and other options.

• Recent asset sales and refinancings are expected to support ongoing liquidity and operational flexibility.