Brookfield Renewable Reports Strong First Quarter Results
HAMILTON, BERMUDA--(Marketwired - May 2, 2014) -
Investors, analysts and other interested parties can access
Brookfield Renewable's 2014 first quarter results as well as the
Letter to Shareholders and Supplemental Results on the web site
under the Investor Relations section at
www.brookfieldrenewable.com.
The 2014 first quarter results conference call can be accessed
via webcast on May 2, 2014 at 9:00 a.m. ET at
www.brookfieldrenewable.com or via teleconference at 1-800-319-4610 toll
free in North America. For overseas calls please dial 1-604-638-5340, at
approximately 8:50 a.m. ET. The teleconference taped rebroadcast
can be accessed at 1-800-319-6413
(password: 1557#) until June 2, 2014.
All amounts in U.S. dollars unless stated otherwise
Brookfield Renewable Energy Partners L.P. (TSX: BEP.UN)(NYSE:
BEP) ("Brookfield Renewable") today announced strong results for
the three months ended March 31, 2014.
"Our first quarter results reflect the strong performance from
our portfolio and provide an early indication of the strategic
impact of positioning the business for improving market
fundamentals and expanding into new markets," said Richard Legault,
President and CEO. "We expect these initiatives to grow and
diversify our revenue streams and to support the long-term growth
of cash flows and distributions on a per-unit basis."
Financial Results
Unaudited |
|
US$ millions (except per unit or otherwise noted) |
Three months ended March 31 |
|
2014 |
2013 |
Generation (GWh) |
|
|
|
|
- Total |
|
5,711 |
|
5,535 |
- Brookfield Renewable's share |
|
4,756 |
|
4,634 |
Revenues |
$ |
480 |
$ |
437 |
Adjusted EBITDA(1) |
$ |
360 |
$ |
319 |
Funds from operations (FFO)(1) |
$ |
185 |
$ |
162 |
FFO per unit(1)(2) |
$ |
0.70 |
$ |
0.61 |
(1) |
Non-IFRS measure. Refer to "Cautionary Statement Regarding Use of
Non-IFRS Measures". |
(2) |
For
the three months ended March 31, 2014 weighted average LP units,
Redeemable/Exchangeable units and General partnership units totaled
265.3 million (2013: 265.2 million). |
Review of Operations
For the first quarter, adjusted EBITDA achieved a quarterly record
of $360 million, an increase of 13% compared to $319 million in Q1
2013. Funds from operations (FFO) increased 14% to $185 million or
$0.70 per unit as compared with $162 million or $0.61 per unit in
the prior year. Results benefited from higher electricity prices in
the northeastern United States and Brazil, which added $35 million
to FFO in the quarter.
Total generation for the three months ended March 31, 2014 was
5,711 GWh, an increase of 176 GWh from the same period in the prior
year.
The hydroelectric portfolio generated 5,001 GWh, in-line with the
long-term average (LTA) of 4,916 GWh and an increase of 222 GWh as
compared to the first quarter of 2013. Generation from existing
hydroelectric assets was 4,711 GWh compared to 4,779 GWh for the
prior year. Portfolios acquired in Maine during the quarter and the
first quarter of 2013 contributed another 231 GWh of generation,
and a facility commissioned in Brazil in the first quarter of 2013
contributed an additional 59 GWh.
The wind portfolio generated 610 GWh as compared to LTA of 635 GWh,
and an increase of 71 GWh compared to the first quarter of 2013.
Generation increased over the prior year due to improved wind
conditions and an incremental 27 GWh from a full quarter's
contribution from facilities acquired in California in the first
quarter of 2013.
The tables below summarize generation by segment and region:
|
Generation (GWh)(1) |
Variance of Results |
|
For the three months ended March 31 |
Actual 2014 |
Actual 2013 |
LTA 2014 |
Actual vs. LTA |
|
Actual vs. Prior Year |
|
Hydroelectric generation |
|
|
|
|
|
|
|
|
United States |
2,591 |
2,561 |
2,794 |
(203 |
) |
30 |
|
|
Canada |
1,311 |
1,282 |
1,193 |
118 |
|
29 |
|
|
Brazil (2) |
1,099 |
936 |
929 |
170 |
|
163 |
|
|
5,001 |
4,779 |
4,916 |
85 |
|
222 |
|
Wind Energy |
|
|
|
|
|
|
|
|
United States |
273 |
216 |
311 |
(38 |
) |
57 |
|
|
Canada |
337 |
323 |
324 |
13 |
|
14 |
|
|
610 |
539 |
635 |
(25 |
) |
71 |
|
Other |
100 |
217 |
219 |
(119 |
) |
(117 |
) |
Total generation (3) |
5,711 |
5,535 |
5,770 |
(59 |
) |
176 |
|
(1) |
For
assets acquired or reaching commercial operation during the year,
this figure is calculated from the acquisition or commercial
operation date. |
(2) |
In
Brazil, assured generation levels are used as a proxy for LTA. |
(3) |
Includes our share of generation in respect of those
equity-accounted investments which we do not manage. |
Recent Highlights
- Brookfield Renewable and its institutional partners completed
the acquisition of a 33% economic and 50% voting interest in the
417 MW Safe Harbor hydroelectric generating station on the
Susquehanna River in Pennsylvania. The facility generates an
average of 1,100 GWh annually, possesses storage capabilities
supporting daily peaking and is one of the largest conventional
hydroelectric facilities in the PJM market.
- Brookfield Renewable and its institutional partners agreed to
acquire the wind portfolio of Bord Gáis Energy for a total
enterprise value of up to approximately EUR700 million ($960
million), subject to customary closing adjustments. The portfolio
comprises 321 MW of operating wind capacity with an additional 125
MW currently in construction and an approximate 300 MW development
pipeline. The transaction represents Brookfield's first renewable
energy investment outside the Americas and provides a strong
foundation to build a scalable renewable energy business in
Europe.
- The 45 MW Kokish River hydroelectric facility in British
Columbia entered commercial operation in April 2014. The project
was developed by Brookfield Renewable and its partners, the 'Namgis
First Nation.
- Brookfield Renewable and its institutional partners completed
the acquisition of the 70 MW Black Bear hydroelectric portfolio in
Maine.
- Liquidity at quarter-end was approximately $1.2 billion,
providing the financial resources and flexibility to fund ongoing
growth initiatives.
- On March 21, 2014, Brookfield Renewable was included in the
S&P/TSX Composite Index, the benchmark index for the Canadian
equity markets.
- The previously announced distribution increase of 7% to $1.55
on an annualized basis took effect with the March 31, 2014
payment.
Distribution Increase and Declaration
The Board of Directors has declared a quarterly distribution in
the amount of $0.3875 per limited partnership unit, payable on June
30, 2014 to unitholders of record as at the close of business on
May 30, 2014. This distribution is consistent with Brookfield
Renewable's policy of targeting a long-term, sustainable
distribution in the range of 60-70% of FFO and which increases on
average by 3% to 5% annually.
The regular quarterly dividends on the Brookfield Renewable
Power Preferred Equity Inc. preferred shares have also been
declared.
Distribution Currency Option
The quarterly distributions payable on limited partnership units
of Brookfield Renewable Energy Partners are declared in U.S.
dollars. Registered and beneficial shareholders who are resident in
Canada or the United States may opt to receive their distributions
in either U.S. dollars or the Canadian dollar equivalent. Unless
they request the Canadian dollar equivalent, shareholders will
continue to receive distributions in U.S. dollars (which may be
converted for them by the broker or other intermediary, as may
currently be the case). The Canadian dollar equivalent of the
quarterly distribution will be based on the Bank of Canada noon
exchange rate on the record date or, if the record date falls on a
weekend or holiday, on the Bank of Canada noon exchange rate of the
preceding business day.
Registered shareholders wishing to receive the Canadian dollar
distribution equivalent should contact Brookfield Renewable's
transfer agent, Computershare Trust Company of Canada, in writing
at 100 University Avenue, 8th Floor, Toronto, Ontario M5J 2Y1 or by
phone at 1-800-564-6253.
Beneficial unitholders (i.e., those holding their units in street
name with their brokerage) should contact the broker with whom
their units are held.
Distribution Reinvestment Plan
Brookfield Renewable maintains a Distribution Reinvestment Plan
("DRIP") which allows holders of its limited partnership units who
are resident in Canada to acquire additional units by reinvesting
all or a portion of their cash distributions without paying
commissions. Information on the DRIP, including details on how to
enroll, is available on Brookfield Renewable's website at
www.brookfieldrenewable.com/DRIP.
Additional information on Brookfield Renewable's distributions
and preferred share dividends can be found on its website at
www.brookfieldrenewable.com under Investor Relations.
Additional Information
The Letter to Shareholders and the Supplemental Results for the
period ended March 31, 2014 contain further information on
Brookfield Renewable's strategy, operations and financial results.
Shareholders are encouraged to read these documents, which are
available at www.brookfieldrenewable.com.
Brookfield Renewable Energy Partners (TSX:BEP.UN)(NYSE:BEP)
operates one of the largest publicly-traded, pure-play renewable
power platforms globally. Its portfolio is primarily hydroelectric
and totals over 6,000 megawatts of installed capacity. Diversified
across 71 river systems and 12 power markets in the United States,
Canada and Brazil, the portfolio's output is sold predominantly
under long-term contracts and generates enough electricity from
renewable resources to power more than three million homes on
average each year. With a portfolio of high-quality assets and
strong growth prospects, the business is positioned to generate
stable, long-term cash flows supporting regular and growing cash
distributions to shareholders. For more information, please visit
www.brookfieldrenewable.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements and
information, within the meaning of Canadian securities laws and
"forward-looking statements" within the meaning 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" of
the United States Private Securities Litigation Reform Act of 1995
and in any applicable Canadian securities regulations, concerning
the business and operations of Brookfield Renewable.
Forward-looking statements may include estimates, plans,
expectations, opinions, forecasts, projections, guidance or other
statements that are not statements of fact. Forward-looking
statements in this news release include statements regarding the
quality of Brookfield Renewable's assets and the resiliency of the
cash flow they will generate, Brookfield Renewable's anticipated
financial performance, future commissioning of assets, contracted
portfolio, technology diversification, acquisition opportunities,
expected completion of acquisitions, future energy prices and
demand for electricity, economic recovery, achieving long-term
average generation, project development and capital expenditure
costs, diversification of shareholder base, energy policies,
economic growth, growth potential of renewable asset class, the
future growth prospects and distribution profile of Brookfield
Renewable and Brookfield Renewable's access to capital.
Forward-looking statements can be identified by the use of words
such as "plans", "expects", "scheduled", "estimates", "intends",
"anticipates", "believes", "potentially", "tends", "continue",
"attempts", "likely", "primarily", "approximately", "endeavours",
"pursues", "strives", "seeks", or variations of such words and
phrases, or statements that certain actions, events or results
"may", "could", "would", "might" or "will" be taken, occur or be
achieved. Although we believe that our anticipated future results,
performance or achievements expressed or implied by the
forward-looking statements and information in this news
release are based upon reasonable assumptions and
expectations, we cannot assure you that such expectations will
prove to have been correct. You should not place undue reliance on
forward-looking statements and information as such statements and
information involve known and unknown risks, uncertainties and
other factors which may cause our actual results, performance or
achievements to differ materially from anticipated future results,
performance or achievement expressed or implied by such
forward-looking statements and information.
Factors that could cause actual results to differ materially
from those contemplated or implied by forward-looking statements
include, but are not limited to: our limited operating history; the
risk that we may be deemed an "investment company" under the
Investment Company Act; the fact that we are not subject to the
same disclosure requirements as a U.S. domestic issuer; the risk
that the effectiveness of our internal controls over financial
reporting could have a material effect on our business; changes to
hydrology at our hydroelectric stations or in wind conditions at
our wind energy facilities; the risk that counterparties to our
contracts do not fulfill their obligations, and as our contracts
expire, we may not be able to replace them with agreements on
similar terms; increases in water rental costs (or similar fees) or
changes to the regulation of water supply; volatility in supply and
demand in the energy market; our operations are highly regulated
and exposed to increased regulation which could result in
additional costs; the risk that our concessions and licenses will
not be renewed; increases in the cost of operating our plants; our
failure to comply with conditions in, or our inability to maintain,
governmental permits; equipment failure; dam failures and the costs
of repairing such failures; exposure to force majeure events;
exposure to uninsurable losses; adverse changes in currency
exchange rates; availability and access to interconnection
facilities and transmission systems; health, safety, security and
environmental risks; disputes, governmental and regulatory
investigations and litigation; our operations could be affected by
local communities; losses resulting from fraud, bribery,
corruption, other illegal acts, inadequate or failed internal
processes or systems, or from external events; risks relating to
our reliance on computerized business systems; general industry
risks relating to operating in the North American and Brazilian
power market sectors; advances in technology that impair or
eliminate the competitive advantage of our projects; newly
developed technologies in which we invest not performing as
anticipated; labour disruptions and economically unfavourable
collective bargaining agreements; our inability to finance our
operations due to the status of the capital markets; the operating
and financial restrictions imposed on us by our loan, debt and
security agreements; changes in our credit ratings; changes to
government regulations that provide incentives for renewable
energy; our inability to identify sufficient investment
opportunities and complete transactions; risks related to the
growth of our portfolio and our inability to realize the expected
benefits of our transactions; our inability to develop existing
sites or find new sites suitable for the development of greenfield
projects; risks associated with the development of our generating
facilities and the various types of arrangements we enter into with
communities and joint venture partners; Brookfield Asset
Management's election not to source acquisition opportunities for
us and our lack of access to all renewable power acquisitions that
Brookfield Asset Management identifies; our lack of control over
our operations conducted through joint ventures, partnerships and
consortium arrangements; our ability to issue equity or debt for
future acquisitions and developments will be dependent on capital
markets; foreign laws or regulation to which we become subject as a
result of future acquisitions in new markets; and the departure of
some or all of Brookfield's key professionals.
We caution that the foregoing list of important factors that
may affect future results is not exhaustive. The forward-looking
statements represent our views as of the date of this
news release and should not be relied upon as
representing our views as of any date subsequent to May 2, 2014,
the date of this news release. While we
anticipate that subsequent events and developments may cause our
views to change, we disclaim any obligation to update the
forward-looking statements, other than as required by applicable
law. For further information on these known and unknown risks,
please see "Risk Factors" included in our Form 20-F.
CAUTIONARY STATEMENT REGARDING USE OF NON-IFRS MEASURES
This news release contains references to
adjusted EBITDA, funds from operations and adjusted funds from
operations, which are not generally accepted accounting measures
under IFRS and therefore may differ from definitions of adjusted
EBITDA, funds from operations and adjusted funds from operations
used by other entities. We believe that these are useful
supplemental measures that may assist investors in assessing the
financial performance and the cash anticipated to be generated by
our operating portfolio. Neither adjusted EBITDA, funds from
operations nor adjusted funds from operations should be considered
as the sole measure of our performance and should not be considered
in isolation from, or as a substitute for, analysis of our
financial statements prepared in accordance with IFRS.
References to Brookfield Renewable are to Brookfield Renewable
Energy Partners L.P. together with its subsidiary and operating
entities unless the context reflects otherwise.
FINANCIAL REVIEW FOR THE THREE MONTHS ENDED MARCH 31, 2014
The following table reflects adjusted EBITDA, funds from
operations, adjusted funds from operations, and a reconciliation to
net income for the three months ended March 31:
(MILLIONS, EXCEPT AS NOTED) |
2014 |
|
2013 |
|
Revenues |
$ |
480 |
|
$ |
437 |
|
Other income |
|
3 |
|
|
2 |
|
Share of cash earnings from equity-accounted
investments |
|
7 |
|
|
6 |
|
Direct operating costs |
|
(130 |
) |
|
(126 |
) |
Adjusted EBITDA(1) |
|
360 |
|
|
319 |
|
Interest expense - borrowings |
|
(101 |
) |
|
(102 |
) |
Management service costs |
|
(11 |
) |
|
(12 |
) |
Current income taxes |
|
(8 |
) |
|
(3 |
) |
Less: cash portion of non-controlling interests |
|
|
|
|
|
|
|
Preferred equity |
|
(9 |
) |
|
(7 |
) |
|
Participating non-controlling interests - in operating
subsidiaries |
|
(46 |
) |
|
(33 |
) |
Funds from operations(1) |
|
185 |
|
|
162 |
|
Less: sustaining capital expenditures(2) |
|
(14 |
) |
|
(14 |
) |
Adjusted funds from operations(1) |
|
171 |
|
|
148 |
|
Add: cash portion of non-controlling interests |
|
55 |
|
|
40 |
|
Add: sustaining capital expenditures |
|
14 |
|
|
14 |
|
Other items: |
|
|
|
|
|
|
|
Depreciation |
|
(126 |
) |
|
(128 |
) |
|
Unrealized financial instrument gain |
|
- |
|
|
16 |
|
|
Share
of non-cash loss from equity-accounted investments |
|
(6 |
) |
|
(2 |
) |
Deferred income tax recovery |
|
(2 |
) |
|
(1 |
) |
Other |
|
19 |
|
|
(2 |
) |
Net income |
$ |
125 |
|
$ |
85 |
|
|
|
|
|
|
|
|
Basic and diluted earnings per LP Unit(3) |
$ |
0.29 |
|
$ |
0.23 |
|
(1) |
Non-IFRS measures. See "Cautionary Statement Regarding Use of
Non-IFRS Measures". |
(2) |
Based
on long-term capital expenditure plans. |
(3) |
Average LP Units outstanding during the period totaled 133.0
million (2013: 132.9 million). |
FINANCIAL RESULTS ON A CONSOLIDATED AND PROPORTIONATE BASIS
The following table illustrates generation results for the three
months ended March 31, 2014 on a proportionate basis, while
adjusting for the share from facilities in which we own less than
100%.
|
Proportionate |
Third party interests |
Consolidated |
Generation (GWh)(1) |
Wholly- owned assets |
Partially- owned assets |
Equity- accounted investments |
Total |
|
|
Hydroelectric generation |
|
|
|
|
|
|
|
United States |
1,283 |
531 |
66 |
1,880 |
711 |
2,591 |
|
Canada |
1,309 |
- |
1 |
1,310 |
1 |
1,311 |
|
Brazil(2) |
978 |
17 |
27 |
1,022 |
77 |
1,099 |
|
3,570 |
548 |
94 |
4,212 |
789 |
5,001 |
Wind energy |
|
|
|
|
|
|
|
United States |
62 |
45 |
- |
107 |
166 |
273 |
|
Canada |
337 |
- |
- |
337 |
- |
337 |
|
399 |
45 |
- |
444 |
166 |
610 |
Other |
100 |
- |
- |
100 |
- |
100 |
Total generation -2014 |
4,069 |
593 |
94 |
4,756 |
955 |
5,711 |
Total generation -2013 |
4,074 |
419 |
141 |
4,634 |
901 |
5,535 |
(1) |
For
assets acquired or reaching commercial operation during the year,
this figure is calculated from the acquisition or commercial
operation date. |
(2) |
In
Brazil, assured energy generation levels are used as a proxy for
long-term average. |
The following table illustrates our financial results for the
three months ended March 31, 2014, including revenues, adjusted
EBITDA and funds from operations on a proportionate basis, while
adjusting for our share from facilities in which we own less than
100%:
|
Proportionate |
|
Third party interests |
|
Consolidated |
|
(MILLIONS, EXCEPT AS NOTED) |
Wholly- owned assets |
|
Partially- owned assets |
|
Equity- accounted investments |
Total |
|
|
|
|
|
Revenues |
$ |
327 |
|
$ |
74 |
|
$ |
- |
$ |
401 |
|
$ |
79 |
|
$ |
480 |
|
Other
income |
|
3 |
|
|
- |
|
|
- |
|
3 |
|
|
- |
|
|
3 |
|
Share
of cash earnings from equity-accounted investments |
|
- |
|
|
- |
|
|
7 |
|
7 |
|
|
- |
|
|
7 |
|
Direct operating costs |
|
(99 |
) |
|
(13 |
) |
|
- |
|
(112 |
) |
|
(18 |
) |
|
(130 |
) |
Adjusted EBITDA(1) |
|
231 |
|
|
61 |
|
|
7 |
|
299 |
|
|
61 |
|
|
360 |
|
Interest expense - borrowings |
|
(70 |
) |
|
(16 |
) |
|
- |
|
(86 |
) |
|
(15 |
) |
|
(101 |
) |
Management service costs |
|
(11 |
) |
|
- |
|
|
- |
|
(11 |
) |
|
- |
|
|
(11 |
) |
Current income taxes |
|
(7 |
) |
|
(1 |
) |
|
- |
|
(8 |
) |
|
- |
|
|
(8 |
) |
Preferred equity |
|
(9)(2) |
|
|
- |
|
|
- |
|
(9 |
) |
|
- |
|
|
(9 |
) |
Participating non-controlling interests - in operating
subsidiaries |
|
- |
|
|
- |
|
|
- |
|
- |
|
|
(46)(2) |
|
|
(46 |
) |
Funds from operations - 2014(1) |
$ |
134 |
|
$ |
44 |
|
$ |
7 |
$ |
185 |
|
$ |
- |
|
$ |
185 |
|
Funds from operations - 2013(1) |
$ |
124 |
|
$ |
32 |
|
$ |
6 |
$ |
162 |
|
$ |
- |
|
$ |
162 |
|
(1) |
Non-IFRS measures. Refer to "Cautionary Statement Regarding Use of
Non-IFRS Measures". |
(2) |
Represents third party interests' funds from operations. |
Brookfield Renewable Energy Partners L.P.Zev KormanVice
President, Investor and Media
Relations416-359-1955zev.korman@brookfield.comwww.brookfieldrenewable.com
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