Brookfield Renewable Partners L.P. (
TSX: BEP.UN;
NYSE: BEP) (“
Brookfield Renewable
Partners”, "
BEP") today reported
financial results for the three months ended March 31, 2021.
“We had a strong quarter, as we executed on our
key priorities, including investing in growth, delivering on our
corporate contracting initiatives and bolstering our liquidity,”
said Connor Teskey, CEO of Brookfield Renewable. “The tailwinds for
renewables are accelerating as governments and businesses around
the world are intensifying their focus on decarbonization. Given
our global scale, operational depth, and financial strength, we
remain uniquely positioned to participate in the accelerating build
out of renewables that will impact all sectors of the
economy.”
Financial
Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions (except per unit or otherwise noted) |
For the three months endedMarch
31 |
Unaudited |
|
2021 |
|
|
|
2020 |
|
Total generation (GWh) |
|
|
|
|
– Long-term average generation |
|
14,099 |
|
|
|
14,151 |
|
– Actual generation |
|
13,828 |
|
|
|
14,264 |
|
Brookfield Renewable Partner's share (GWh) |
|
|
|
|
– Long-term average generation |
|
7,602 |
|
|
|
6,717 |
|
– Actual generation |
|
7,375 |
|
|
|
7,164 |
|
Net
income (loss) attributable to Unitholders |
$ |
(133 |
) |
|
$ |
20 |
|
Per LP unit(1) |
|
(0.24 |
) |
|
|
0.01 |
|
Funds From Operations (FFO)(2) |
|
242 |
|
|
|
217 |
|
Per Unit(2)(3) |
|
0.38 |
|
|
|
0.37 |
|
Normalized Funds From Operations (FFO)(2)(4) |
|
257 |
|
|
|
193 |
|
Per Unit(2)(3)(4) |
|
0.40 |
|
|
|
0.33 |
|
(1) |
For the three months ended March 31, 2021, average LP units
totaled 274.8 million (2020: 268.5 million). |
(2) |
Non-IFRS measures. Refer
to “Cautionary Statement Regarding Use of Non-IFRS
Measures”. |
(3) |
Average Units outstanding for the
three months ended March 31, 2021 were 645.5 million (2020:
583.7 million), being inclusive of our LP units,
Redeemable/Exchangeable partnership units, BEPC exchangeable shares
and general partner interest. The actual Units outstanding at
March 31, 2021 were 645.6 million (2020: 467.0 million). |
(4) |
Normalized FFO assumes long-term
average generation in all segments except the Brazil and Colombia
hydroelectric segments and uses 2020 foreign currency rates. For
the three months ended March 31, 2021, the change related to
long-term average generation totaled $12 million (2020: $(24)
million) and the change related to foreign currency totaled $3
million. |
Brookfield Renewable reported FFO of $242
million or $0.38 per Unit for the three months ended March 31,
2021, a 3% increase from prior year, and $257 million or $0.40 per
Unit on a normalized basis, a 21% increase from the prior year.
After deducting depreciation and one-time non-cash charges, our Net
loss attributable to Unitholders for the three months ended
March 31, 2021 was $133
million or $0.24 per LP unit.
Highlights
- Generated FFO of $242 million, or
$0.38 per unit, a 21% increase on a normalized per unit basis over
the same period in the prior year;
- Progressed approximately 6,000
megawatts through construction and advanced stage permitting, and
added nearly 4,500 megawatts to our development
pipeline;
- We signed 29 agreements for
approximately 2,300 GWh of renewable generation with corporate
offtakers across all major industries and including many of the
largest counterparties by market capitalization in the
world;
- Invested or agreed to invest $1.6
billion (nearly $410 million net to Brookfield Renewable) of equity
across a range of transactions, including onshore wind, offshore
wind, utility scale solar, and distributed generation, in the
United States, Europe, and India;
- Issued a $350 million perpetual
green subordinated note issuance at a fixed rate of 4.625%. Our
balance sheet remains robust with almost $3.4 billion of
available liquidity and no meaningful near-term maturities;
and
- Raised over $850 million
(approximately $410 million net to Brookfield Renewable) from asset
recycling initiatives, including the sale of mature onshore wind
portfolios in Ireland and the U.S. at attractive values, returning
approximately two times our invested capital.
Update on Growth
Initiatives
As the opportunity to invest in renewables and
decarbonization expands, we continue to exercise a value-oriented
approach to growing our business. We remain disciplined in focusing
on opportunities that play to our strengths – where we can invest
for value, leverage our operating capabilities to increase
cashflow, and deploy incremental capital at attractive returns to
grow our businesses over time. Recently, we executed on a number of
transactions that highlight this approach.
For the past several years, we monitored the
offshore wind sector, while not investing. But as the technology
has grown and matured, we have become more comfortable. This
quarter we closed our first investment in offshore wind, which
includes a pipeline to build 3 gigawatts of capacity supported by
an attractive contract structure, over the next several years.
Similarly, in India, one of the largest and fastest growing
renewable markets globally, we continue to grow our business
following our initial investment in 2017. Having grown our
capabilities in the region, we now are seeing a steady pipeline of
opportunities to incrementally add to our platform at attractive
returns.
Recently, we signed or closed the following
transactions:
- Shepherds Flat – An 845-megawatt
wind farm in Oregon that includes one of the largest repowering
opportunities in the world. Once completed we expect total
generation to increase by approximately 25%. We are making good
progress on the repowering and are also advancing a 400-megawatt
new-build development pipeline that was included in the
transaction;
- Investment in Polenergia – A scale
renewable business in Europe with an interest in a 3 gigawatt
offshore wind development pipeline. We believe Polenergia has
tremendous growth prospects, and we are well positioned as both a
supportive operating partner and capital provider to the
business;
- Exelon Distributed Generation (DG)
– A distributed generation business, comprising 360 megawatts of
operating capacity with an additional over 700 megawatts under
development. We now own one of the leading distributed generation
businesses in the U.S., with deep operating, development, and
origination capabilities, and an almost 2,000-megawatt portfolio
that generates high-quality contracted cash flows that are
diversified by geography and customer; and
- Indian Solar Project - On the back
of a relationship established through our acquisition of a
portfolio of loans from a non-bank financial company at the end of
2020, we signed an agreement which gives us the right to acquire a
450-megawatt shovel ready solar project from one of the largest
developers in India. The project is expected to be commissioned by
the end of the year and is backed by 25-year power purchase
agreements with a high-quality state utility. We expect to invest
$70 million ($20 million net to Brookfield Renewable) of equity in
the project and are targeting 20%+ returns.
Results from Operations
During the first quarter, we generated FFO of
$242 million, or $0.38 per unit, reflecting solid performance, as
our operations benefited from strong asset availability, growth,
and efficiency initiatives. On a normalized basis, our per unit
results were up 21% year-over-year.
With an increasingly diversified portfolio of
operating assets, limited concentration risk with counterparties,
and a long-term contract profile, our cash flows are highly
resilient. While generation for the quarter was marginally below
the long-term average, driven largely by drier conditions in New
York, we expect this variability, and therefore manage our business
for the long-term. Further, we are continuously diversifying the
business, which increasingly mitigates exposure to any single
resource, market, or counterparty and our variability becomes less
and less every year.
During the quarter, our hydroelectric segment
delivered FFO of $170 million. Across this portfolio, we continue
to focus on securing contracts that value the uniqueness of our
fleet as a generator of dispatchable clean electricity and
ancillary services.
Our wind and solar segments generated a combined
$158 million of FFO, as we continue to generate stable revenues
from these assets and benefit from the diversification of our fleet
and highly contracted cash flows with long duration power purchase
agreements. There was severe winter weather in the quarter, in
particular in Texas. The conditions did not have a material impact
on our financial results due to our operating and power marketing
capabilities which reacted to mitigate risk. We are proud of how
our teams performed during these difficult times, keeping our
employees safe, and our operations running.
Our energy transition segment generated $33
million of FFO during the quarter as our portfolio continues to
grow as we assist commercial and industrial partners achieve their
decarbonization goals and provide critical grid-stabilizing
ancillary services and back-up capacity required to address the
increasing intermittency of greener electricity grids.
Balance Sheet and Liquidity
Our financial position continues to be strong.
We have approximately $3.4 billion of available liquidity, our
investment grade balance sheet has no meaningful near-term
maturities, and approximately 90% of our financings are
non-recourse to Brookfield Renewable.
We continued to take advantage of the low
interest environment and executed on $3.1 billion of investment
grade financings, including $350 million 4.625% fixed rate green
perpetual subordinated notes. The notes have the same accounting
and rating treatment as our preferred LP units.
We also continue to execute our capital
recycling strategy of selling mature, de-risked or non-core assets
to lower cost of capital buyers while redeploying the proceeds into
higher yielding opportunities. The proceeds from these transactions
will be used to fund growth opportunities executed in the quarter,
as well as our robust future growth pipeline.
In April, we agreed to sell our remaining 360
megawatts of operating assets and development pipeline in Ireland,
and approximately 270 megawatts of our ready to build wind assets
in Scotland, for an aggregate equity value of approximately $450
million (approximately $250 million proceeds net to Brookfield
Renewable). We entered the European renewable market in 2014 with
the acquisition of Bord Gáis’ wind portfolio in Ireland. When we
acquired this business, it was part of a state-owned utility with
approximately 300 megawatts of operating wind capacity. Under our
ownership, we grew the business to over 700 megawatts of total
operating assets by building out the development portfolio, and we
expanded the development pipeline to approximately 1,000 megawatts.
Consistent with our strategy when we enter new markets, we used
this investment as a steppingstone to grow our business across
Europe, including the acquisition of our development pipeline in
Scotland in 2015.
Today, across Europe, we have expanded our
capabilities to become a fully integrated platform with extensive
corporate contracting, operating and growth capabilities. Following
the completion of this sale, we will have more than 300 employees
and over 10,000 megawatts of operating and development assets in
the region. With this sale, we will have fully exited our initial
investment in Ireland, having previously sold 375 megawatts of
operating assets. In aggregate, we generated 15%+ compound annual
returns on this investment. These sales, which are subject to
customary closing conditions, are expected to close in the second
quarter.
We also signed an agreement to sell 390
megawatts of wind assets primarily in California for a total equity
value of approximately $370 million (approximately $160 million
proceeds net to Brookfield Renewable), generating returns of
approximately two times our invested capital. Under our ownership,
the facilities were substantially de-risked by completing our
business plan, which included developing several of the assets,
establishing long-term revenue certainty, reducing operating and
maintenance costs, and optimizing the capital structure. This sale,
which is subject to customary closing conditions, is expected to
close in the third quarter.
Distribution Declaration
The next quarterly distribution in the amount of
$0.30375 per LP unit, is payable on June 30, 2021 to unitholders of
record as at the close of business on May 28, 2021. In conjunction
with the Partnership’s distribution declaration, the Board of
Directors of BEPC has declared an equivalent quarterly dividend of
$0.30375 per share, also payable on June 30, 2021 to shareholders
of record as at the close of business on May 28, 2021. Brookfield
Renewable targets a sustainable distribution with increases
targeted on average at 5% to 9% annually.
The quarterly dividends on BEP's preferred
shares and preferred LP units have also been declared.
Distribution Currency
Option
The quarterly distributions payable on the BEP
units and BEPC shares are declared in U.S. dollars. Unitholders who
are residents in the United States will receive payment in U.S.
dollars and unitholders who are residents in Canada will receive
the Canadian dollar equivalent unless they request otherwise. The
Canadian dollar equivalent of the quarterly distribution will be
based on the Bank of Canada daily average exchange rate on the
record date or, if the record date falls on a weekend or holiday,
on the Bank of Canada daily average exchange rate of the preceding
business day.
Registered unitholders who are residents in
Canada who wish to receive a U.S. dollar distribution and
registered unitholders who are residents in the United States
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 Partners maintains a
Distribution Reinvestment Plan (“DRIP”) which allows holders of BEP
units who are residents in Canada to acquire additional LP 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 our website at
www.bep.brookfield.com/stock-and-distribution/distributions/drip.
Additional information on Brookfield Renewable’s
distributions and preferred share dividends can be found on our
website at www.bep.brookfield.com.
Brookfield Renewable
Brookfield Renewable operates one of the world’s
largest publicly traded, pure-play renewable power platforms. Our
portfolio consists of hydroelectric, wind, solar and storage
facilities in North America, South America, Europe and Asia, and
totals approximately 21,000 megawatts of installed capacity and an
approximately 27,000 megawatts development pipeline. Brookfield
Renewable is listed on the New York and Toronto stock exchanges.
Further information is available at https://bep.brookfield.com.
Important information may be disseminated exclusively via the
website; investors should consult the site to access this
information.
Brookfield Renewable is the flagship listed
renewable power company of Brookfield Asset Management, a leading
global alternative asset manager with over $600 billion of assets
under management.
Please note that Brookfield Renewable’s previous
audited annual and unaudited quarterly reports filed with the U.S.
Securities and Exchange Commission (“SEC”) and securities
regulators in Canada, are available on our website at
https://bep.brookfield.com, on SEC’s website at www.sec.gov and on
SEDAR’s website at www.sedar.com. Hard copies of the annual and
quarterly reports can be obtained free of charge upon request.
Contact information: |
|
Media: |
Investors: |
Claire Holland |
Robin Kooyman |
Senior Vice President - Communications |
Senior Vice President - Investor Relations |
(416) 369-8236 |
(416) 649-8172 |
claire.holland@brookfield.com |
robin.kooyman@brookfield.com |
Quarterly Earnings Call
Details
Investors, analysts and other interested parties
can access Brookfield Renewable’s 2021 First Quarter Results as
well as the Letter to Unitholders and Supplemental Information on
Brookfield Renewable’s website at https://bep.brookfield.com.
The conference call can be accessed via webcast
on May 4, 2021 at 9:00 a.m. Eastern Time at
https://edge.media-server.com/mmc/p/qp22gowd or via teleconference
at 1-866-688-9430 toll free in North America. If dialing from
outside Canada or the U.S., please dial 1-409-216-0817 at
approximately 8:50 a.m. Eastern Time. When prompted, enter the
conference ID, 6528239. A recording of the teleconference can be
accessed through May 11, 2021 at 1-855-859-2056, or from outside
Canada and the U.S. please call 1-404-537-3406. When prompted,
enter the conference ID, 6528239.
Brookfield Renewable Partners L.P. |
Consolidated Statements of Financial Position |
|
As of |
UNAUDITED(MILLIONS) |
March 31 |
December 31 |
2021 |
2020 |
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
358 |
|
|
$ |
431 |
|
Trade receivables and other financial assets |
|
1,732 |
|
|
1,661 |
|
Equity-accounted investments |
|
981 |
|
|
971 |
|
Property, plant and equipment, at fair value |
|
44,280 |
|
|
44,590 |
|
Goodwill |
|
1,010 |
|
|
970 |
|
Deferred income tax and other assets |
|
2,540 |
|
|
1,099 |
|
Total Assets |
|
$ |
50,901 |
|
|
$ |
49,722 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Corporate borrowings |
|
$ |
2,162 |
|
|
$ |
2,135 |
|
Borrowings which have recourse only to assets they finance |
|
16,813 |
|
|
15,947 |
|
Accounts payable and other liabilities |
|
5,331 |
|
|
4,358 |
|
Deferred income tax liabilities |
|
5,161 |
|
|
5,515 |
|
|
|
|
|
|
Equity |
|
|
|
|
Non-controlling interests |
|
|
|
|
Participating non-controlling interests – in operating
subsidiaries |
$ |
11,604 |
|
|
$ |
11,100 |
|
|
General partnership interest in a holding subsidiary held by
Brookfield |
50 |
|
|
56 |
|
|
Participating non-controlling interests – in a holding subsidiary
– Redeemable/Exchangeable units held by Brookfield |
2,466 |
|
|
2,721 |
|
|
Class A shares of Brookfield Renewable Corporation |
2,184 |
|
|
2,408 |
|
|
Preferred equity |
617 |
|
|
609 |
|
|
Preferred limited partners' equity |
1,028 |
|
|
1,028 |
|
|
Limited partners' equity |
3,485 |
|
21,434 |
|
3,845 |
|
21,767 |
|
Total Liabilities and Equity |
|
$ |
50,901 |
|
|
$ |
49,722 |
|
Brookfield Renewable Partners L.P. |
Consolidated Statements of Operating Results |
UNAUDITED |
|
For the three months endedMarch
31 |
(MILLIONS, EXCEPT AS NOTED) |
|
2021 |
2020 |
Revenues |
|
$ |
1,020 |
|
$ |
1,049 |
|
Other income |
|
27 |
|
15 |
|
Direct operating costs |
|
(391 |
) |
(326 |
) |
Management service costs |
|
(81 |
) |
(40 |
) |
Interest expense |
|
(233 |
) |
(239 |
) |
Share of earnings from
equity-accounted investments |
|
5 |
|
2 |
|
Foreign exchange and financial
instrument gain |
|
48 |
|
20 |
|
Depreciation |
|
(368 |
) |
(337 |
) |
Other |
|
(99 |
) |
(12 |
) |
Income tax recovery
(expense) |
|
|
|
Current |
|
(16 |
) |
(20 |
) |
Deferred |
|
33 |
|
(23 |
) |
Net income (loss) |
|
$ |
(55 |
) |
$ |
89 |
|
Net
income attributable to preferred equity and non-controlling
interests in operating subsidiaries |
|
(78 |
) |
(69 |
) |
Net
income (loss) attributable to Unitholders |
|
$ |
(133 |
) |
$ |
20 |
|
Basic
and diluted income (loss) per LP unit |
|
$ |
(0.24 |
) |
$ |
0.01 |
|
Brookfield Renewable Partners L.P. |
Consolidated Statements of Cash Flows |
|
|
|
|
|
|
For the three months endedMarch
31 |
UNAUDITED(MILLIONS) |
|
2021 |
2020 |
Operating
activities |
|
|
|
Net income (loss) |
|
$ |
(55 |
) |
$ |
89 |
|
Adjustments for the following
non-cash items: |
|
|
|
Depreciation |
|
368 |
|
337 |
|
Unrealized foreign exchange and financial instrument loss
(gain) |
|
(27 |
) |
(20 |
) |
Share of loss (earnings) from equity-accounted investments |
|
(5 |
) |
(2 |
) |
Deferred income tax expense (recovery) |
|
(33 |
) |
23 |
|
Other non-cash items |
|
14 |
|
15 |
|
Net
change in working capital and other |
|
89 |
|
17 |
|
|
|
351 |
|
459 |
|
Financing
activities |
|
|
|
Net corporate borrowings |
|
(3 |
) |
38 |
|
Non-recourse borrowings,
net |
|
674 |
|
(11 |
) |
Capital contributions from
participating non-controlling interests – in operating
subsidiaries, net |
|
814 |
|
9 |
|
Issuance of preferred limited
partnership units |
|
— |
|
195 |
|
Distributions paid: |
|
|
|
To participating non-controlling interests - in operating
subsidiaries |
|
(118 |
) |
(134 |
) |
To preferred shareholders & limited partners' unitholders |
|
(21 |
) |
(18 |
) |
To unitholders of Brookfield Renewable or BRELP |
|
(216 |
) |
(182 |
) |
Borrowings from related party, net |
|
245 |
|
— |
|
|
|
1,375 |
|
(103 |
) |
Investing
activities |
|
|
|
Acquisitions net of cash and
cash equivalents in acquired entity |
|
(1,428 |
) |
(106 |
) |
Investment in property, plant
and equipment |
|
(289 |
) |
(65 |
) |
Disposal of subsidiaries,
associates and other securities, net |
|
2 |
|
81 |
|
Restricted cash and other |
|
(50 |
) |
(50 |
) |
|
|
(1,765 |
) |
(140 |
) |
Foreign
exchange gain (loss) on cash |
|
(11 |
) |
(15 |
) |
Cash and cash equivalents |
|
|
|
Increase (decrease) |
|
(50 |
) |
201 |
|
Net change in cash classified within assets held for sale |
|
(23 |
) |
(4 |
) |
Balance, beginning of period |
|
431 |
|
352 |
|
|
|
|
|
Balance, end of period |
|
$ |
358 |
|
$ |
549 |
|
PROPORTIONATE RESULTS FOR THE THREE MONTHS ENDED MARCH
31
The following chart reflects the generation and
summary financial figures on a proportionate basis
for the three months ended March 31:
|
(GWh) |
|
|
(MILLIONS) |
|
Actual Generation |
|
|
LTA Generation |
|
|
Revenues |
|
|
Adjusted EBITDA |
|
|
FFO |
|
|
Net Income (Loss) |
|
2021 |
2020 |
|
|
2021 |
2020 |
|
|
2021 |
2020 |
|
|
2021 |
2020 |
|
|
2021 |
2020 |
|
|
2021 |
2020 |
Hydroelectric |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
3,128 |
|
3,722 |
|
|
3,233 |
|
3,233 |
|
|
$ |
205 |
|
$ |
265 |
|
|
$ |
141 |
|
$ |
197 |
|
|
|
$ |
104 |
|
$ |
155 |
|
|
|
$ |
4 |
|
$ |
75 |
|
Brazil |
1,152 |
|
1,227 |
|
|
988 |
|
988 |
|
|
52 |
|
61 |
|
|
48 |
|
47 |
|
|
|
39 |
|
41 |
|
|
|
23 |
|
25 |
|
Colombia |
833 |
|
709 |
|
|
806 |
|
798 |
|
|
55 |
|
60 |
|
|
35 |
|
36 |
|
|
|
27 |
|
25 |
|
|
|
22 |
|
23 |
|
|
5,113 |
|
5,658 |
|
|
5,027 |
|
5,019 |
|
|
312 |
|
386 |
|
|
224 |
|
280 |
|
|
|
170 |
|
221 |
|
|
|
49 |
|
123 |
|
Wind |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
1,107 |
|
831 |
|
|
1,435 |
|
944 |
|
|
122 |
|
60 |
|
|
81 |
|
48 |
|
|
|
62 |
|
30 |
|
|
|
(24 |
) |
(10 |
) |
Europe |
371 |
|
221 |
|
|
380 |
|
253 |
|
|
43 |
|
22 |
|
|
67 |
|
13 |
|
|
|
60 |
|
10 |
|
|
|
10 |
|
(11 |
) |
Brazil |
126 |
|
68 |
|
|
126 |
|
126 |
|
|
7 |
|
4 |
|
|
4 |
|
3 |
|
|
|
2 |
|
1 |
|
|
|
(2 |
) |
(4 |
) |
Asia |
112 |
|
90 |
|
|
100 |
|
100 |
|
|
7 |
|
6 |
|
|
6 |
|
5 |
|
|
|
4 |
|
3 |
|
|
|
1 |
|
(1 |
) |
|
1,716 |
|
1,210 |
|
|
2,041 |
|
1,423 |
|
|
179 |
|
92 |
|
|
158 |
|
69 |
|
|
|
128 |
|
44 |
|
|
|
(15 |
) |
(26 |
) |
Solar |
327 |
|
183 |
|
|
364 |
|
214 |
|
|
77 |
|
34 |
|
|
59 |
|
24 |
|
|
|
30 |
|
8 |
|
|
|
(22 |
) |
(18 |
) |
Energy
transition |
219 |
|
113 |
|
|
170 |
|
61 |
|
|
70 |
|
33 |
|
|
46 |
|
21 |
|
|
|
33 |
|
17 |
|
|
|
7 |
|
13 |
|
Corporate |
— |
|
— |
|
|
— |
|
— |
|
|
— |
|
— |
|
|
2 |
|
(3 |
) |
|
|
(119 |
) |
(73 |
) |
|
|
(152 |
) |
(72 |
) |
Total |
7,375 |
|
7,164 |
|
|
7,602 |
|
6,717 |
|
|
$ |
638 |
|
$ |
545 |
|
|
$ |
489 |
|
$ |
391 |
|
|
|
$ |
242 |
|
$ |
217 |
|
|
|
$ |
(133 |
) |
$ |
20 |
|
The following table reconciles the non-IFRS
financial metrics to the most directly comparable IFRS measures.
Net income attributable to Unitholders is reconciled to Funds From
Operations and reconciled to Proportionate Adjusted EBITDA for the
three months ended March 31:
|
|
For the three months endedMarch
31 |
UNAUDITED(MILLIONS) |
|
2021 |
2020 |
Net income (loss) attributable
to: |
|
|
|
Limited partners' equity |
|
$ |
(66 |
) |
$ |
2 |
|
General partnership interest in a holding subsidiary held by
Brookfield |
|
20 |
|
16 |
|
Participating non-controlling interests – in a holding subsidiary –
Redeemable/Exchangeable units held by Brookfield |
|
(46 |
) |
2 |
|
Class A shares of Brookfield Renewable Corporation |
|
(41 |
) |
— |
|
Net income (loss) attributable
to Unitholders |
|
$ |
(133 |
) |
$ |
20 |
|
Adjusted for proportionate
share of: |
|
|
|
Depreciation |
|
237 |
|
170 |
|
Foreign exchange and financial instruments gain |
|
— |
|
(1 |
) |
Deferred income tax expense (recovery) |
|
(35 |
) |
6 |
|
Other |
|
173 |
|
22 |
|
Funds From Operations |
|
$ |
242 |
|
$ |
217 |
|
Normalized long-term average generation adjustment |
|
12 |
|
(24 |
) |
Normalized foreign
currency adjustment |
|
3 |
|
— |
|
Normalized Funds From Operations |
|
$ |
257 |
|
$ |
193 |
|
Normalized Funds From Operations Adjustments |
|
(15 |
) |
24 |
|
Distributions attributable
to: |
|
|
|
Preferred limited partners' equity |
|
14 |
|
12 |
|
Preferred equity |
|
7 |
|
7 |
|
Current income taxes |
|
6 |
|
9 |
|
Interest expense |
|
139 |
|
113 |
|
Management service costs |
|
81 |
|
33 |
|
Proportionate Adjusted
EBITDA |
|
489 |
|
391 |
|
Attributable to
non-controlling interests |
|
197 |
|
370 |
|
Consolidated Adjusted EBITDA |
|
$ |
686 |
|
$ |
761 |
|
The following table reconciles the per Unit
non-IFRS financial metrics to the most directly comparable IFRS
measures. Basic income per LP unit is reconciled to FFO per Unit,
for the three months ended March 31:
|
|
For the three months endedMarch
31 |
|
|
2021 |
2020 |
Basic income (loss) per LP unit(1) |
|
$ |
(0.24 |
) |
$ |
0.01 |
|
Depreciation |
|
0.37 |
|
0.29 |
|
Deferred income tax recovery (expense) |
|
(0.05 |
) |
0.01 |
|
Other |
|
0.30 |
|
0.06 |
|
Funds From Operations per
Unit(2) |
|
$ |
0.38 |
|
$ |
0.37 |
|
Normalized long-term average generation adjustment |
|
0.02 |
|
(0.04 |
) |
Normalized Funds From Operations per Unit |
|
$ |
0.40 |
|
$ |
0.33 |
|
- Average LP units outstanding for the three months ended
March 31, 2021 were 274.8 million (2020: 268.5 million).
- Average units for the three months ended March 31, 2021
were 645.5 million (2020: 583.7 million), being inclusive of
LP units, Redeemable/Exchangeable partnership units, general
partner interest, and BEPC exchangeable shares.
BROOKFIELD RENEWABLE CORPORATION
REPORTS FIRST QUARTER 2021 RESULTS
All amounts in U.S. dollars unless otherwise
indicated
The Board of Directors of Brookfield Renewable
Corporation ("BEPC" or our "company") (NYSE, TSX: BEPC) today has
declared a quarterly dividend of $0.30375 per class A exchangeable
subordinate voting share of BEPC (a "Share"), payable on June 30,
2021 to shareholders of record as at the close of business on May
28, 2021. This dividend is identical in amount per share and has
identical record and payment dates to the quarterly distribution
announced today by BEP on BEP's LP units.
The BEPC exchangeable shares are structured with
the intention of being economically equivalent to the non-voting
limited partnership units of Brookfield Renewable Partners L.P.
("BEP" or the "Partnership") (NYSE, BEP; TSX: BEP.UN). We believe
economic equivalence is achieved through identical dividends and
distributions on the BEPC exchangeable shares and BEP's LP units
and each BEPC exchangeable share being exchangeable at the option
of the holder for one BEP LP unit at any time. Given the economic
equivalence, we expect that the market price of the Shares will be
significantly impacted by the market price of BEP's LP units and
the combined business performance of our company and BEP as a
whole. In addition to carefully considering the disclosures made in
this news release in its entirety, shareholders are strongly
encouraged to carefully review BEP's continuous disclosure filings
available electronically on EDGAR on the SEC's website at
www.sec.gov or on SEDAR at www.sedar.com.
Financial
Results |
|
|
|
|
|
|
|
|
Millions (except, otherwise noted) |
Three months ended March 31 |
Unaudited |
2021 |
|
2020 |
|
|
|
|
Proportionate Generation (GWh) |
4,703 |
|
4,640 |
|
Net income (loss) attributable to the Partnership |
$ |
(9 |
) |
$ |
62 |
|
Funds From Operations (FFO)(1) |
$ |
126 |
|
$ |
148 |
|
(1) Non-IFRS measures. Refer
to “Cautionary Statement Regarding Use of Non-IFRS
Measures”.
BEPC reported FFO of $126 million for the three
months ended March 31, 2021, compared to $148 million in the
prior year. After deducting non-cash depreciation, our Net loss
attributable to the Partnership for the three months ended
March 31, 2021 was $9 million.
BROOKFIELD RENEWABLE CORPORATION |
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
|
|
|
|
|
UNAUDITED(MILLIONS) |
March 31 |
December 31 |
|
2021 |
|
2020 |
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
298 |
|
|
$ |
355 |
|
Trade receivables and other financial assets |
|
1,368 |
|
|
1,297 |
|
Equity-accounted investments |
|
372 |
|
|
372 |
|
Property, plant and equipment, at fair value |
|
34,009 |
|
|
36,097 |
|
Goodwill |
|
898 |
|
|
970 |
|
Deferred income tax and other assets |
|
1,188 |
|
|
382 |
|
Total Assets |
|
$ |
38,133 |
|
|
$ |
39,473 |
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
Borrowings which have recourse only to assets they finance |
|
$ |
12,299 |
|
|
$ |
12,822 |
|
Accounts payable and other liabilities |
|
3,763 |
|
|
3,296 |
|
Deferred income tax liabilities |
|
3,997 |
|
|
4,200 |
|
|
|
|
|
|
BEPC exchangeable and BEPC class B shares |
|
7,336 |
|
|
7,430 |
|
|
|
|
|
|
Non-controlling interests |
|
|
|
|
Participating non-controlling interests – in operating
subsidiaries |
$ |
9,683 |
|
|
$ |
10,290 |
|
|
Participating non-controlling interests – in a holding
subsidiary held by the Partnership |
241 |
|
|
258 |
|
|
The Partnership |
814 |
|
10,738 |
|
1,177 |
|
11,725 |
|
Total Liabilities and Equity |
|
$ |
38,133 |
|
|
$ |
39,473 |
|
BROOKFIELD RENEWABLE
CORPORATION |
|
|
CONSOLIDATED STATEMENTS OF INCOME |
|
|
|
|
UNAUDITED |
Three months ended March 31 |
(MILLIONS) |
2021 |
2020 |
|
|
|
Revenues |
$ |
839 |
|
$ |
853 |
|
Other income |
14 |
|
10 |
|
Direct operating costs |
(338 |
) |
(279 |
) |
Management service costs |
(55 |
) |
(29 |
) |
Interest expense |
(220 |
) |
(168 |
) |
Share of earnings from
equity-accounted investments |
2 |
|
1 |
|
Foreign exchange and financial
instrument gain |
34 |
|
35 |
|
Depreciation |
(290 |
) |
(259 |
) |
Other |
(146 |
) |
(9 |
) |
Remeasurement of BEPC
exchangeable and BEPC class B shares |
94 |
|
— |
|
Income tax expense |
|
|
Current |
(13 |
) |
(19 |
) |
Deferred |
17 |
|
(41 |
) |
Net income (loss) |
$ |
(62 |
) |
$ |
95 |
|
Net income (loss) attributable
to: |
|
|
Non-controlling interests: |
|
|
Participating non-controlling interests – in operating
subsidiaries |
$ |
(56 |
) |
$ |
29 |
|
Participating non-controlling interests – in a holding subsidiary
held by thePartnership |
3 |
|
4 |
|
The Partnership |
(9 |
) |
62 |
|
|
$ |
(62 |
) |
$ |
95 |
|
BROOKFIELD RENEWABLE
CORPORATION |
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS |
|
|
|
|
|
UNAUDITED(MILLIONS) |
Three months ended March 31 |
|
2021 |
2020 |
Operating
activities |
|
|
Net income (loss) |
$ |
(62 |
) |
$ |
95 |
|
Adjustments for the following
non-cash items: |
|
|
Depreciation |
290 |
|
259 |
|
Unrealized foreign exchange and financial instruments gain |
(17 |
) |
(35 |
) |
Share of earnings from equity-accounted investments |
(2 |
) |
(1 |
) |
Deferred income tax expense |
(17 |
) |
41 |
|
Other non-cash items |
50 |
|
(10 |
) |
Remeasurement of BEPC
exchangeable and BEPC class B shares |
(94 |
) |
— |
|
Net
change in working capital |
144 |
|
18 |
|
|
292 |
|
367 |
|
Financing
activities |
|
|
Non-recourse borrowings,
net |
(1 |
) |
128 |
|
Capital contributions from
participating non-controlling interests |
27 |
|
5 |
|
Capital contributions from the
Partnership |
— |
|
50 |
|
Distributions paid and return
of capital: |
|
|
To participating non-controlling interests |
(136 |
) |
(137 |
) |
To the Partnership |
— |
|
(100 |
) |
Borrowings from related party, net |
53 |
|
(29 |
) |
|
(57 |
) |
(83 |
) |
Investing
activities |
|
|
Acquisitions net of cash and
cash equivalents in acquired entity |
— |
|
(105 |
) |
Investment in property, plant
and equipment |
(239 |
) |
(33 |
) |
Restricted cash and other |
(38 |
) |
(30 |
) |
|
(277 |
) |
(168 |
) |
Foreign
exchange gain (loss) on cash |
(10 |
) |
(12 |
) |
Cash and cash equivalents |
|
|
Increase (decrease) |
(52 |
) |
104 |
|
Net change in cash classified within assets held for sale |
(5 |
) |
— |
|
Balance, beginning of period |
355 |
|
304 |
|
Balance, end of period |
$ |
298 |
|
$ |
408 |
|
The following table reconciles net income (loss) attributable to
Brookfield Renewable to Funds From Operations for the three ended
March 31:
|
Three months endedMarch 31 |
(MILLIONS) |
2021 |
2020 |
Net income (loss) attributable to the partnership |
$ |
(9 |
) |
$ |
62 |
|
Adjusted for proportionate
share of: |
|
|
Depreciation |
126 |
|
75 |
|
Other |
51 |
|
11 |
|
Dividends on BEPC class A exchangeable shares |
52 |
|
— |
|
Remeasurement of BEPC exchangeable and class B shares |
(94 |
) |
— |
|
Funds
From Operations |
126 |
|
148 |
|
Cautionary Statement Regarding Forward-looking
Statements
This news release contains forward-looking
statements and information within the meaning of Canadian
provincial 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” provisions of the United States Private
Securities Litigation Reform Act of 1995 and in any applicable
Canadian securities regulations. The words “will”, “intend”,
“should”, “could”, “target”, “growth”, “expect”, “believe”, “plan”,
derivatives thereof and other expressions which are predictions of
or indicate future events, trends, or prospects and which do not
relate to historical matters identify the above mentioned and other
forward-looking statements. Forward-looking statements in this news
release include statements regarding the quality of Brookfield
Renewable’s and its subsidiaries’ businesses and our expectations
regarding future cash flows and distribution growth. They include
statements regarding Brookfield Renewable’s anticipated financial
performance, future commissioning of assets, contracted nature of
our portfolio, technology diversification, acquisition
opportunities, expected completion of acquisitions and
dispositions, financing and refinancing opportunities, BEPC’s
ability to attract new investors as well as the future performance
and prospects of BEPC and BEP, the prospects and benefits of the
combination of Brookfield Renewable and TerraForm Power, including
certain information regarding the combined company’s expected cash
flow profile and liquidity, future energy prices and demand for
electricity, economic recovery, achieving long-term average
generation, project development and capital expenditure costs,
energy policies, economic growth, growth potential of the renewable
asset class, the future growth prospects and distribution profile
of Brookfield Renewable and Brookfield Renewable’s access to
capital. Although Brookfield Renewable believes that these
forward-looking statements and information are based upon
reasonable assumptions and expectations, you should not place undue
reliance on them, or any other forward -looking statements or
information in this news release. The future performance and
prospects of Brookfield Renewable are subject to a number of known
and unknown risks and uncertainties. Factors that could cause
actual results of Brookfield Renewable to differ materially from
those contemplated or implied by the statements in this news
release include (without limitation) our inability to identify
sufficient investment opportunities and complete transactions, the
growth of our portfolio and our inability to realize the expected
benefits of our transactions or acquisitions; weather conditions
and other factors which may impact generation levels at facilities;
adverse outcomes with respect to outstanding, pending or future
litigation; economic conditions in the jurisdictions in which
Brookfield Renewable operates; ability to sell products and
services under contract or into merchant energy markets; changes to
government regulations, including incentives for renewable energy;
ability to complete development and capital projects on time and on
budget; inability to finance operations or fund future acquisitions
due to the status of the capital markets; health, safety, security
or environmental incidents; regulatory risks relating to the power
markets in which Brookfield Renewable operates, including relating
to the regulation of our assets, licensing and litigation; risks
relating to internal control environment; contract counterparties
not fulfilling their obligations; changes in operating expenses,
including employee wages, benefits and training, governmental and
public policy changes, and other risks associated with the
construction, development and operation of power generating
facilities. For further information on these known and unknown
risks, please see “Risk Factors” included in the Form 20-F of BEP
and in the Form 20-F of BEPC and other risks and factors that are
described therein.
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
subsequent date. 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.
No securities regulatory authority has either
approved or disapproved of the contents of this news release. This
news release is for information purposes only and shall not
constitute an offer to sell or the solicitation of an offer to buy,
nor shall there be any sale of these securities in any state or
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such state or jurisdiction.
Cautionary Statement Regarding Use of
Non-IFRS Measures
This news release contains references to FFO,
FFO per Unit and Normalized FFO per Unit, which are not generally
accepted accounting measures under IFRS and therefore may differ
from definitions of FFO, FFO per Unit and Normalized FFO per Unit
used by other entities. We believe that FFO, FFO per Unit and
Normalized FFO per Unit are useful supplemental measures that may
assist investors in assessing the financial performance and the
cash anticipated to be generated by our operating portfolio. None
of FFO, FFO per Unit and Normalized FFO per Unit 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. For a
reconciliation of the non-IFRS financial measures to the most
comparable IFRS financial measures, see “Part 4 – Financial
Performance Review on Proportionate Information – Reconciliation of
non-IFRS measures” in our interim report for the period ended March
31, 2021. Normalized FFO assumes long-term average generation in
all segments except the Brazil and Colombia hydroelectric segments
and uses 2020 foreign currency rates.
References to Brookfield Renewable are to
Brookfield Renewable Partners L.P. together with its subsidiary and
operating entities unless the context reflects otherwise.
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