Brookfield Renewable Corp Q4 FY2024 earnings call

• 2024 was a record year for the business, with 10% FFO per unit growth driven by inflation-linked and contracted cash flows, acquisitions, and organic growth initiatives. • Invested $12.5 billion in outstanding businesses, including investment in Neoen. • Signed contracts for almost 19,000 gigawatt hours per year of generation, a record performance. • Signed landmark renewable energy framework agreement with Microsoft to deliver 10.5 gigawatts of new capacity between 2026 and 2030. • Commissioned a record 7,000 megawatts of new capacity globally. • Generated a record $2.8 billion of proceeds in 2024 from asset recycling at an average 25% IRR. • Balance sheet remains strong with $4.3 billion of liquidity.

Hydroelectric business generated solid results, with the Colombian business Isagen helping offset weaker hydrology in North America. Wind and solar segments generated record funds from operations, up 30% from the previous year due to contributions from recent acquisitions. Distributed energy, storage, and sustainable solutions segments generated record results, up 78% year-on-year with full year contribution from Westinghouse.

• Expect to build on strong asset recycling momentum in 2025 and deliver larger and more recurring monetizations with healthy returns. • Aim to deliver 12% to 15% long-term total returns for investors while remaining disciplined allocators of capital.

• Potential regulatory changes in the US renewables sector, though management doesn't expect material adjustments to policies most impacting the business. • Uncertainty around tariffs and potential higher equipment or steel costs, with plans to pass through such costs in PPA prices. • Market volatility affecting public equities and sector sentiment.

Q: Can you give more context on exceeding targets for the Microsoft framework agreement?

A: The 10.5 gigawatts is the floor, not the ceiling; we expect to deliver well more than that as we have a large development pipeline and strong demand.

Q: Broader updates on replicating framework deals with other corporates?

A: Having discussions with various corporates, with both framework agreements and project-by-project activities showing demand.

Q: Thoughts on developing or acquiring gas-fired generation?

A: Will remain focused on renewables but could consider gas if it accelerates renewables build-out and offers attractive risk-adjusted returns.

Q: How are contracts structured regarding tax subsidies?

A: Increasingly putting adjusters in PPAs to keep development margins whole if tax credits change.

Q: Exposure to tariffs and equipment costs?

A: Would pass through such costs in PPA prices and have procurement frameworks to manage.

Q: Data center growth driven by AI vs other factors?

A: AI is the biggest demand driver, with supply-demand imbalance still in favor of power producers even with new energy-efficient tech.

Q: Share price and capital allocation?

A: Similar to previous market dislocations, will continue executing strategy and consider share buybacks.

Q: Color on framework agreements with suppliers and safe harboring US development plans?

A: Large scale and robust access to capital differentiate us, allowing engagement with large offtakers regardless of formal agreements.

Q: Data center announcements vs PPA contracts?

A: Demand outweighs supply, but advanced pipeline in data center markets has scarcity value, showing high development margins.

Q: Comments on other renewable companies cutting back growth?

A: All renewables companies see demand, but we are well-positioned with focus on mature, low-cost technologies and disciplined funding.