Brookfield Business Partners (BBU) Q3 2024 earnings summary

Executive summary

• Net income attributable to unitholders for Q3 2024 was $301 million ($1.39 per unit), reversing a net loss of $44 million in Q3 2023, with Adjusted EBITDA rising to $844 million, driven by a $296 million benefit from U.S. IRA credits at the advanced energy storage operation and strong segment performance.

• Major developments included the acquisition of Network International, to be combined with Magnati, creating a leading digital payments platform in the Middle East and Africa.

• Over $350 million generated from distributions and monetizations, including the sale of a significant portion of Altera and the offshore oil services' shuttle tanker segment.

• Since inception, $6 billion realized from 20 business sales, with a 3x capital multiple and ~30% IRR.

• Shares have appreciated nearly 70% year-over-year but still trade at a discount to intrinsic value.

Financial highlights

• Q3 2024 Adjusted EBITDA was $844 million, up from $655 million year-over-year, with a $296 million benefit from U.S. IRA credits at Clarios/advanced energy storage.

• Net income attributable to unitholders was $301 million ($1.39 per unit), compared to a net loss of $44 million in Q3 2023.

• Revenues for Q3 2024 were $9,232 million, down from $14,399 million in Q3 2023, mainly due to asset sales.

• Adjusted EFO for the quarter was $582 million, including $131 million of net gains from asset dispositions.

• Corporate liquidity at quarter-end was approximately $1.5 billion, pro forma $1.6 billion after recent transactions.

Outlook and guidance

• Annual benefit from U.S. IRA credits at Clarios/advanced energy storage expected to be sustainable at current production levels.

• Anticipated normalization of demand at the engineered components manufacturer next year.

• Lottery services and modular building leasing are focusing on cost optimization and digital growth, with new contracts expected to boost future results.

• Housing prices in Canada expected to rise as mortgage rates decline; residential mortgage insurer continues to perform well.

• Proceeds from asset sales are expected to accelerate growth in core operations and further strengthen liquidity.