Brookfield Business Partners L.P.(US:BBU)2023-08-08 16:00Financial Performance - Total assets as of June 30, 2023, amounted to $90.3 billion, with revenues of $27.3 billion for the six months ended June 30, 2023[230]. - For Q2 2023, the company reported revenues of $13,506 million, a decrease of $1,101 million (7.5%) compared to $14,607 million in Q2 2022[285]. - Net income for Q2 2023 was $41 million, down from $280 million in Q2 2022, resulting in a loss of $0.22 per limited partner unit compared to a gain of $0.62 per unit in the prior year[283]. - Net income for the six months ended June 30, 2023, was $270 million, compared to a loss of $72 million in the same period of 2022[366]. - Other income for Q2 2023 increased to $138 million, compared to a net expense of $218 million in Q2 2022, driven by net gains on debt modifications and extinguishments[293]. - The net income for the three months ended June 30, 2023, was $41 million, while the net income for the six months ended June 30, 2023, was $244 million[358][361]. Revenue Segmentation - The business services segment generated revenues of $15.8 billion, while the infrastructure services segment contributed $4.0 billion, and the industrials segment accounted for $7.4 billion[230]. - Revenues from nuclear technology services operations were $1,006 million and $2,062 million for the three and six months ended June 30, 2023, with direct operating costs of $898 million and $1,833 million respectively[250]. - Adjusted EFO for the business services segment was $119 million for the three months ended June 30, 2023, compared to $138 million for the same period in 2022[328]. - Adjusted EFO in the infrastructure services segment for the three months ended June 30, 2023 was $88 million, a decrease of $36 million (29.0%) from $124 million in the same period of 2022[341]. - Adjusted EFO in the industrials segment for the three months ended June 30, 2023 was $63 million, a decrease of $38 million (37.6%) from $101 million in the same period of 2022[348]. Operational Highlights - The partnership's residential mortgage insurer is the largest private sector residential mortgage insurer in Canada, significantly increasing access to homeownership for Canadian residents[233]. - The dealer software and technology services operations closed the sale of a non-core division for approximately $490 million, resulting in a gain of $87 million[236]. - The healthcare services operations operate 38 hospitals, primarily generating revenues from private health insurance funds and government-related bodies[237]. - The construction operations focus on high-quality construction, primarily on large-scale and complex landmark buildings and social infrastructure[238]. - The offshore oil services operations emerged from Chapter 11 restructuring with a deleveraged balance sheet, maintaining approximately 53% economic interest[253]. Cash Flow and Liquidity - Cash flow from operating activities for the six months ended June 30, 2023, was $560 million, an increase from $224 million for the same period in 2022[394]. - Total cash flow used in financing activities was $102 million for the six months ended June 30, 2023, compared to $8,859 million provided in the same period in 2022[395]. - Cash flow provided by investing activities was $337 million for the six months ended June 30, 2023, a significant improvement from $9,215 million used in the same period in 2022[397]. - The partnership's consolidated net debt was $43,876 million, with a net debt-to-capitalization ratio of 70%[390]. - Liquidity is managed through cash flows from operations, credit facilities, and monetizing mature operations, with a strong liquidity profile to pursue acquisition opportunities[376]. Capital Expenditures and Assets - Capital expenditures for the six months ended June 30, 2023, included $301 million in maintenance capital and $1,045 million in growth capital, compared to $328 million and $581 million, respectively, for the same period in 2022[310]. - Financial assets increased by $521 million to $13,429 million as of June 30, 2023, compared to $12,908 million as of December 31, 2022[303]. - Inventory and other assets increased by $725 million to $8,284 million as of June 30, 2023, compared to $7,559 million as of December 31, 2022[307]. - Property, plant & equipment (PP&E) increased by $403 million to $16,296 million as of June 30, 2023, compared to $15,893 million as of December 31, 2022, driven by $1,650 million in additions and impacted by foreign exchange movements of $175 million[308]. Debt and Financing - The partnership's financing arrangements totaled $44,908 million as of June 30, 2023, reflecting an increase primarily due to new borrowings for acquisitions[381]. - The weighted average interest rate on debt outstanding was 7.9% as of June 30, 2023, with approximately 50% of non-recourse borrowings being fixed or hedged[382]. - The partnership has a total capacity of $2.3 billion in bilateral credit facilities, with $310 million available as of June 30, 2023[384]. - The revolving acquisition credit facility with Brookfield allows borrowings of up to $1 billion, maturing on April 27, 2028, and will decrease to $500 million on April 27, 2024[385]. Regulatory and Accounting Changes - The partnership adopted IFRS 17 effective January 1, 2023, impacting the reported results of its residential mortgage insurer[409]. - The transition impact of IFRS 17 resulted in a $17 million increase to opening equity on January 1, 2022[409]. - The adoption of IFRS 17 does not materially impact cash flows generated by the partnership[410]. - Amendments to IAS 12 were adopted on January 1, 2023, with no material impact on the partnership's financial statements[411].