Brookfield BRP Holdings Canada 4.875% Perpetual Subordinated Notes Q3 FY2025 earnings call

Key Points

• Generated $302 million FFO ($0.46 per unit), up 10% YOY, expecting 10% plus FFO per unit growth for 2025.
• Advanced commercial priorities, signing contracts for 4,000 GWh/year of generation and commissioning 1,800 MW of new projects.
• Westinghouse partnership with U.S. government to invest at least $80B in new nuclear reactors, expected to drive nuclear growth.
• Increasing demand for hydro as baseload power, with contracts signed with Google and Microsoft.
• Advanced global battery strategy, delivering 340-MW battery in Australia.
• Deployed $7.7B in financings, $2.8B in capital recycling, maintaining $4.7B liquidity and BBB+ rating.

During the third quarter, Brookfield Renewable generated $302 million of FFO, or $0.46 per unit, up 10% year-over-year. The Hydroelectric segment delivered FFO of $119 million, up over 20% due to solid generation in Canadian and Colombian fleets, higher pricing in U.S. operations, and operational activities. The wind and solar segments combined generated $177 million of FFO, supported by acquisitions but offset by asset sales. The distributed energy, storage and sustainable solutions segments delivered FFO of $127 million, up from the prior year, with growth from the Neoen acquisition and strong performance at Westinghouse. Hydroelectric contributed about 39.4% of total FFO, wind and solar combined about 58.6%, and distributed energy, etc., about 41.7%.

Forward-Looking Statements

• Expect to deliver 10% plus FFO per unit growth for 2025.
• Anticipate FFO contribution from Westinghouse partnership starting in next quarters, ramping up in 3-4 years.
• Focus on deploying capital through M&A and existing businesses, targeting 12%-15% long-term total returns.

• Permitting delays: Incremental progress on permitting, bottleneck to growth.
• Cost overruns: Need for appropriate protections and risk-adjusted returns in nuclear investments.
• Regulatory changes: Uncertainty around FEOC definitions, but manageable within portfolio.

Q: Can you talk about whether you're seeing any improvements in the pace of permitting in the U.S.?

A: Incrementally, but not dramatically. Intent from stakeholders to remedy is there, but progress limited so far.

Q: Can you give an expected time line for the U.S. build-out associated with the Westinghouse agreement?

A: First reactors expected to begin development process in next quarter or two, with contributions ramping up in 3-4 years.

Q: Have there been any changes in your perspective regarding the eligibility of projects in your U.S. development pipeline through 2029 for federal tax credits?

A: Safe harbored entirety of U.S. development pipeline out to 2029; monitoring FEOC definitions, expecting manageable impact.