BROOKFIELD, NEWS, Nov. 07, 2019 (GLOBE NEWSWIRE) — Brookfield Business Partners L.P. (NYSE: BBU) (TSX: BBU.UN) (“Brookfield Business Partners”) announced today financial results for the quarter ended September 30, 2019.
“We are pleased with the strong operating performance we achieved during the quarter and the progress on our growth initiatives,” said Cyrus Madon, CEO of Brookfield Business Partners. “We announced the acquisition of a controlling interest in Genworth Canada and an investment in BrandSafway. We also reached an agreement to acquire the Teekay Offshore units which we did not already own and announced the sale of North American Palladium, furthering our capital recycling initiatives.”Brookfield Business Partners generated Company EBITDA of $368 million compared to $231 million in 2018 reflecting contributions from recent acquisitions in our business services and industrials segments, and growth from our existing businesses. Company FFO for the three months ended September 30, 2019 was $219 million ($1.46 per unit) compared to $170 million ($1.31 per unit) in 2018. For the third quarter 2019, net income attributable to unitholders was $24 million ($0.16 per unit) compared to $93 million ($nil per unit) in 2018 which included the benefit of a non-cash gain recognized last year and lower depreciation and amortization expenses.Operational UpdateThe following table presents Company EBITDA by segment:Our business services segment generated Company EBITDA of $64 million, compared to $32 million in the same period last year. Our construction services and road fuel distribution operations reported improved performance. Results also benefited from incremental contributions from Healthscope and Ouro Verde, which we acquired this year. 2018 results included the contribution from our global relocation services and facilities management businesses, which were sold earlier this year.Our infrastructure services segment generated Company EBITDA of $139 million during the quarter, compared to $107 million in the same period last year. Westinghouse reported strong performance for the quarter supported by the fall outage season at customer plants and strong results in new plant operations in the U.S. and China. Contribution from Teekay Offshore increased primarily as a result of our increased ownership position compared to the prior year period.Our industrials segment generated Company EBITDA of $189 million during the quarter, compared to $112 million in the same period last year. North American Palladium reported strong performance and results included incremental contribution from Clarios which we acquired at the end of April 2019, while results were partially offset by lower contribution from GrafTech. Prior year results included the contribution from our Australian oil and gas operation which was sold in November 2018.The following table presents Company FFO by segment:Company FFO for the three months ended September 30, 2019 was $219 million compared to $170 million in 2018. The increase in Company FFO was a result of incremental contributions from recent investments, and improved performance of certain businesses within our operating segments, offset by businesses sold in the last year.Strategic InitiativesGenworth MI Canada (“Genworth Canada”)
In August 2019, together with institutional partners, we reached a definitive agreement to acquire an approximate 57% controlling interest in Genworth Canada for approximately $1.8 billion (up to $700 million of equity to be funded by Brookfield Business Partners, subject to syndication to institutional partners). Genworth Canada is the largest private sector residential mortgage insurer in Canada, providing mortgage default insurance to Canadian residential mortgage lenders, making homeownership more accessible to first-time homebuyers. We expect to close this transaction by early 2020.BrandSafway
In September 2019, together with institutional partners, we reached a definitive agreement to acquire 45% of BrandSafway, a leading provider of infrastructure services to industrial and commercial facilities for approximately $1.3 billion of equity (Brookfield Business Partners’ share is expected to be $400 million). We expect to close this transaction in the first quarter 2020.Teekay Offshore
In October 2019, together with institutional partners, we entered into an agreement to acquire all of the outstanding publicly held common units representing 27% of the limited partner interests in Teekay Offshore for an aggregate investment of up to approximately $170 million (up to $75 million to be funded by Brookfield Business Partners). As an alternative to the cash consideration offer, minority unitholders have the option to receive one newly designated unlisted common unit of Teekay Offshore for each listed common unit held. The transaction is expected to close in the fourth quarter of 2019.North American Palladium (“NAP”)
In October 2019, we signed an agreement to sell NAP, our pure-play palladium producer, for approximately $570 million. Brookfield Business Partners’ share of the proceeds is expected to be approximately $130 million, after taxes. The sale is expected to close in the fourth quarter of 2019.DistributionThe Board of Directors has declared a quarterly distribution in the amount of $0.0625 per unit, payable on December 31, 2019 to unitholders of record as at the close of business on November 29, 2019. Additional InformationThe 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 at https://bbu.brookfield.com/reports-and-filings.Notes:Attributable to limited partnership unitholders, general partnership unitholders, special limited partnership unitholders and redemption-exchange unitholders.
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