Brookfield Business Partners Increases Value with 2024 Results

Brookfield Business Partners Unveils Strong 2024 Year-End Results

Brookfield Business Partners (NYSE: BBU, BBUC; TSX: BBU.UN, BBUC) reported robust financial results for the year ending December 31, 2024. The company, known for its strategic capital investments and acquisitions, achieved net income of $454 million, a notable increase compared to the previous year's net income.

CEO Anuj Ranjan Reflects on Performance

"2024 demonstrated our resilience and strategic focus. We generated over $2 billion through capital recycling efforts, acquired two leading operations, and maintained a strong financial positioning," stated Anuj Ranjan, CEO of Brookfield Business Partners. He emphasized that the company’s robust balance sheet and liquidity enhance its capacity to drive capital allocation strategies aimed at increasing intrinsic value for unitholders.

Financial Highlights

The financial results revealed significant variation between the years. The net loss attributable to unitholders for 2024 amounted to $396 million, or a loss of $0.49 per limited partnership unit, compared to the previous year's net income of $681 million. This year's loss includes a $215 million one-time non-cash expense linked to revaluation at the company’s energy storage unit and provisions at construction operations. The prior year's results were bolstered by net gains from asset sales within diversified operations.

Adjusted EBITDA Growth

Brookfield reported Adjusted EBITDA for the year at $2,565 million, demonstrating improvement from $2,491 million in 2023. This growth is primarily attributed to strong operational performance and tax benefits realized at the advanced energy storage operation. The results from the previous year included contributions from operations that are no longer part of the company.

Segment Performance Overview

The financial breakdown by segment indicates varied performance across operations. The Industrials segment posted Adjusted EBITDA of $1,247 million in 2024, supported by tax advantages at energy storage services. The Business Services segment realized $832 million in Adjusted EBITDA, primarily affected by challenges within the healthcare services division and cyber issues affecting technology services.

Conversely, the Infrastructure Services segment reported Adjusted EBITDA of $606 million, down from the previous year's $853 million, influenced by the absence of contributions from the nuclear technology services sold amid ongoing operational improvements in offshore oil services.

Strategic Plans and Initiatives

The company is gearing up for increased activities following significant capital commitments. In January, Brookfield raised $5 billion in debt for its advanced energy storage operations. Notably, $4.5 billion of this amount is intended for special distributions for owners, with Brookfield's share being approximately $1.2 billion. This represents an impressive payout relative to Brookfield’s initial equity investment.

In addition, the company is moving forward with its unit repurchase program, allocating up to $250 million for the accelerated buyback of its securities to increase shareholder value. In a major strategic move, Brookfield also acquired Chemelex, a leading manufacturer of electric heat tracing systems, with total enterprise value estimated at $1.7 billion. Brookfield’s investment was approximately $212 million for a 25% economic stake in the business.

Liquidity and Financial Stability

By year-end, Brookfield Business Partners had approximately $1.3 billion in corporate liquidity, which includes cash, liquid securities, and commitments. This puts them in a strong position to pursue additional strategic investments as the market landscape shifts. The company's corporate liquidity rises to $2.7 billion when considering recently announced transactions.

Dividends and Future Outlook

As a commitment to unitholders, Brookfield’s Board of Directors has declared a quarterly distribution of $0.0625 per unit, payable at the end of March for shareholders on record by February. This reflects the firm’s ongoing focus on delivering returns to shareholders while strategically positioning for growth.

Frequently Asked Questions

What were the net income results for Brookfield Business Partners in 2024?

In 2024, Brookfield reported a net loss of $396 million, a decline from the previous year's net income of $454 million.

How did Adjusted EBITDA change year over year?

Adjusted EBITDA increased to $2,565 million for the year ended December 31, 2024, up from $2,491 million in 2023.

What strategic initiatives is Brookfield Business Partners pursuing in 2024?

The company is focusing on capital deployment towards unit repurchase programs and has raised funds for advanced energy storage operations to distribute dividends to shareholders.

How has Brookfield Business Partners' industrial segment performed?

The Industrials segment posted Adjusted EBITDA of $1,247 million in 2024, bolstered by tax benefits, although reduced performance was seen in some manufacturing operations.

What is Brookfield’s approach to liquidity and capital allocation?

Brookfield maintains a strong liquidity position, ending the year with approximately $1.3 billion in liquidity, further enhanced to $2.7 billion through new transactions, allowing for strategic investments to enhance shareholder value.

About The Author

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