Brookfield Infra posts flat Q2 result

The Canada-based asset management firm posted an unchanged "funds from operations" number, with only its transport unit generating better results from a year earlier.

Canada's Brookfield Infrastructure Partners (BIP) posted steady results for the second quarter, with its transport unit showing an improvement over the prior year, according to a statement.

Funds from operations (FFO) – BIP’s key measure, defined as net income excluding the impact of depreciation and amortisation, deferred income taxes, breakage and transaction costs and other non-cash items – totaled $180 million, which was a flat result compared with the same period of last year.

This was due to dispositions made as part of its capital recycling initiative and certain non-recurring items, the statement said.

Net income for the second quarter came in at $13 million, down sharply from the $132 million from a year earlier as “the second quarter of 2013 benefited from gains on certain asset sales and hedging items”.

Sector-wise, BIP’s utilities business generated FFO of $92 million in the second quarter, down slightly from the $96 million a year earlier. The unit saw the sale of its Australasian distribution operations in the fourth quarter of last year, the statement said.

FFO at BIP's transport operations rose to $94 million in the second quarter from $83 million in the prior year period, largely driven by the greater contribution from its Brazilian toll roads, where BIP doubled its stake in September 2013.

Stronger results in its ports business were also recorded – its newly-acquired North American West Coast port operation and its European port operations both reported a strong performance. Nonetheless, the gains in FFO were partially offset by $6 million of non-recurring interest income from a favourable stamp duty ruling at its Australian railroad that was reflected in prior-year results.

European port operations include the Port of Tees and Hartlepool in the UK, plus ports in Germany, France, Spain, Italy, and Finland. Its newly-acquired ports in the US West Coast are in Los Angeles and Oakland.

In total, BIP has investments in 30 ports.

FFO at BIP’s energy business also fell in the second quarter – coming in at $16 million, down slightly from $18 million a year earlier, largely due to lower transportation volumes in its North American gas transmission business and a warmer winter that affected volumes in its UK energy distribution business, the statement said.

In the meantime, BIP’s chief executive Sam Pollock said in the statement that the firm is close to completing $450 million of previously announced acquisitions which will begin to contribute to results during the second half of the year.

BIP expects the imminent close of its investment in VLI, a Brazilian rail and port business, as all consents required for closing this transaction have been granted, according to the statement. This investment will provide it with approximately $300 million of organic growth projects.

It has also received all consents required for the closing of Macquarie District Energy in Chicago, which is also expected to close soon.

Lastly, BIP is still waiting for regulatory consent to close its investment in the Elizabeth container terminal located in the port of New York/New Jersey and for required consents for the acquisition of Seattle Steam. It expects to obtain consents for both of these transactions during the second half of 2014, the statement said.