Brookfield Renewable Partners LP (NYSE:BEP) on Monday posted a 27% year-on-year rise in third-quarter funds from operations (FFO) and unveiled plans to set up a Canadian corporation that would spur investor demand and enhance the liquidity of its securities.
The new corporation will have publicly-listed shares that will trade on the same bourses as the current partnership and will be “economically-equivalent” to the BEP units. Via the move, investors will be given greater flexibility on the options for investment in Brookfield Renewable’s portfolio, having the right to invest in the company either through a partnership or Canadian corporation.
“This should position us well to continue attracting new investors to our globally-diversified renewable power portfolio,” said CEO Sachin Shah.
Existing unitholders of Brookfield Renewables will be distributed one class A share of the new corporation, called Brookfield Renewable Corporation (BEPC), on a tax-free basis for every four BEP units. This will be carried out as a special distribution that is expected to be completed in the first half of next year. Holders of Brookfield Renewable’s preferred limited partnership units will not be entitled to the class A shares.
BEPC’s class A stock is planned to be traded on the New York and Toronto stock exchanges.
Upon completion of the transaction, Brookfield Asset Management Inc (TSE:BAM.A) is expected to hold some 60% of the BEPC class A shares, which equals its effective ownership of Brookfield Renewable units.
Brookfield Renewable closed the July-September quarter with FFO of USD 133 million (EUR 120.6m), up from USD 105 million a year back, mainly thanks to operational improvements and contributions from recent acquisitions. The largest part of the total was brought by the company’s hydropower segment, whose FFO came at USD 125 million, while wind and solar together generated USD 72 million in FFO, up 20% in annual terms. The storage and other operations segment’s FFO, meanwhile, stood at USD 6 million.
More details on the company’s financial performance are available in the table.
| Amounts in USD million, unless otherwise noted |
Q3 2019 |
Q3 2018 |
9mo 2019 |
9mo 2018 |
| Total actual power generation (GWh) |
11,089 |
11,609 |
40,095 |
37,611 |
| --of which company's share (GWh) |
5,213 |
5,552 |
20,061 |
18,701 |
| FFO |
133 |
105 |
590 |
470 |
| FFO per unit |
0.43 |
0.33 |
1.90 |
1.50 |
| Net income attributable to unitholders (loss) |
(53) |
(55) |
7 |
(49) |
The Ontario-based group will pay out a quarterly dividend of USD 0.515 per limited partnership unit on December 31, aiming to lift the distribution by 5%-9% on average annually.
Тhe Canadian firm has over 18,000 MW of installed hydropower, wind, solar and storage capacity in North America, South America, Europe and Asia. In addition, it has an 8,000-MW development pipeline.
(USD 1.0 = EUR 0.907)
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Wind turbines in Ontario, Canada. Image by: CanWEA (www.canwea.ca).
