Brookfield Business Partners announced financial results for the quarter ended June 30, 2023.
“We are pleased with our second quarter results and the progress achieved on our growth initiatives,” said Cyrus Madon, CEO of Brookfield Business Partners. “Our business fundamentals are solid and we continue to surface value through our operational improvement initiatives.”
Net loss attributable to unitholders for the three months ended June 30, 2023 was $48 million ($0.22 loss per limited partnership unit) compared to net income of $137 million ($0.62 per limited partnership unit) in the prior period.
Adjusted EBITDA for the three months ended June 30, 2023 was $606 million compared to $530 million in the prior period, reflecting increased contribution from our Business Services and Infrastructure Services segments.
Operational Update
Our Business Services segment generated Adjusted EBITDA of $223 million for the three months ended June 30, 2023, compared to $153 million for the same period in 2022. Results benefited from the contribution of recent acquisitions, partially offset by reduced contribution from our residential mortgage insurer given a more balanced Canadian housing market. Current period results included contribution from our dealer software and technology services and rental car services operations which we acquired in July 2022 and October 2022, respectively.
Our Infrastructure Services segment generated Adjusted EBITDA of $216 million for the three months ended June 30, 2023, compared to $205 million during the same period in 2022. Higher contribution from lottery services and improved performance at work access services was partially offset by reduced contribution from offshore oil services.
Our Industrials segment generated Adjusted EBITDA of $196 million for the three months ended June 30, 2023, compared to $204 million during the same period in 2022. Increased performance at our advanced energy storage operation driven by higher advanced battery volumes was offset by reduced contribution from smaller operations including graphite electrode operations and our natural gas producer.
Adjusted EFO for the three months ended June 30, 2023 reflected the impact of higher interest expense and higher taxes. Interest expense increased compared to the prior period due to higher interest rates and higher borrowings associated with recent acquisitions. Current tax expense increased compared to the prior period primarily due to higher taxes within our Business Services segment. Adjusted EFO in the current period included an $8 million net gain recognized on a financial asset in our Business Services segment. Prior period Adjusted EFO included a $19 million net gain recognized on the sale of a financial asset in our Business Services segment.
Strategic Initiatives
Payment Processing Services
In June 2023 we reached an agreement to acquire Network International (“Network”), for approximately $3 billion. Network is a leading enabler of digital commerce across the Middle East and Africa, providing a full suite of technology-enabled payment processing services to merchants and financial institutions.
The transaction will be funded with approximately $1.9 billion of equity, of which we expect our share to be approximately $150 million and the balance funded by institutional partners.
Road Fuels Operation
In June 2023 our road fuels operation reached an agreement to sell its North American retail gas station assets for total consideration of approximately $460 million. The transaction is expected to close in the second half of 2023.
Automotive Aftermarket Parts Remanufacturing
In July 2023 we sold a majority of our automotive aftermarket parts remanufacturing operation to a larger competitor and received a royalty interest on the performance of the newly merged business. Upfront cash proceeds from the sale were used to extinguish existing debt within the business.
Liquidity
We ended the quarter with approximately $1.5 billion of liquidity at the corporate level including $177 million of cash and liquid securities and $1.3 billion of availability on our term credit facilities.
Distribution
The Board of Directors has declared a quarterly distribution in the amount of $0.0625 per unit, payable on September 29, 2023 to unitholders of record as at the close of business on August 31, 2023.
Additional Information
The Board has reviewed and approved this news release, including the summarized unaudited consolidated financial statements contained herein.
