BROOKFIELD, NEWS, Aug. 05, 2020 (GLOBE NEWSWIRE) -- Brookfield Infrastructure (NYSE: BIP; TSX: BIP.UN) today announced its results for the second quarter ended June 30, 2020.
“Our business has performed well during the quarter, reflecting the critical nature of our assets and the regulated and contractual frameworks that support them,” said Sam Pollock, Chief Executive Officer of Brookfield Infrastructure Partners. “We are optimistic that the economic recovery will continue for the balance of 2020. Our strong liquidity position and access to capital gives us confidence as we evaluate a number of attractive investment opportunities.”
| For the three months ended June 30 |
For the six months ended June 30 |
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| US$ millions (except per unit amounts), unaudited1 | 2020 | 2019 | 2020 | 2019 | ||||||
| Net income2 | $(61) | $98 | $58 | $128 | ||||||
| – per unit3,4 | $(0.25) | $0.11 | $(0.12) | $0.06 | ||||||
| FFO5 | $333 | $337 | $691 | $688 | ||||||
| – per unit (split-adjusted)6 | $0.72 | $0.76 | $1.49 | $1.55 | ||||||
Underlying results for the partnership benefitted from inflation-indexation, capital commissioned into earnings in the last 12 months as well as the benefit of our asset rotation strategy. These positive factors were more than offset by fair value adjustments related to our corporate hedging program which totaled nearly
During the second quarter, our business generated Funds from Operations (FFO) of
Segment Performance
Our utilities segment generated FFO of
FFO from our Transport segment was
Our energy segment generated FFO of
FFO from our data infrastructure segment was
The following table presents FFO by segment:
| For the three months ended June 30 |
For the six months ended June 30 |
|||||||||||
| US$ millions, unaudited | 2020 | 2019 | 2020 | 2019 | ||||||||
| FFO by segment | ||||||||||||
| Utilities | $130 | $143 | $276 | $280 | ||||||||
| Transport | 108 | 135 | 228 | 274 | ||||||||
| Energy | 106 | 96 | 221 | 203 | ||||||||
| Data Infrastructure | 43 | 30 | 85 | 58 | ||||||||
| Corporate | (54) | (67) | (119) | (127) | ||||||||
| FFO | $333 | $337 | $691 | $688 | ||||||||
Update on Strategic Initiatives
During the quarter, we made progress on several initiatives:
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North American Electricity Transmission – The sale of our North American electricity transmission operation closed in July, resulting in
$60 million of proceeds to BIP and an IRR of 21%. We are advancing two other asset sale processes that we expect will generate over$700 million of additional liquidity. We believe that essential and de-risked infrastructure businesses that performed uninterrupted throughout this recent period will attract strong interest at premium prices.
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Indian Telecom Towers – The closing of our large-scale acquisition of 130,000 telecom towers in
India from Reliance Jio is expected shortly. We have received positive feedback recently from Indian regulators that the remaining approvals are on track. Since we signed our deal, Reliance Jio has raised approximately$20 billion of equity capital from technology companies and private equity investors which has further solidified the credit quality of our anchor tenant. We will invest approximately$500 million of equity (BIP’s share) in the business.
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Capital Market Investments – During the broad market sell-off in March, we acquired stakes in several high-quality infrastructure companies at attractive entry points. The ensuing rebound allowed us to monetize some of our positions and realize substantial profits in a short period of time. We have fully exited a number of these investments, realizing total profits of approximately
$40 million (BIP’s share – approximately $25 million). We continue to accumulate positions in a handful of companies that we hope will lead to broader strategic initiatives in time.
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U.S. Midstream – Dislocation in North American energy markets may provide unique opportunities to invest at value. Our focus is on highly contracted businesses with solid counterparties, limited exposure to volume and pricing risk and long-life, critical infrastructure that complements our existing operations. We believe several opportunities exist to implement this strategy, both in the public and private markets.
Lastly, we are very pleased with the market’s response thus far to Brookfield Infrastructure Corporation (BIPC). Not only has there been significant demand for these shares but BIPC was also recently added to the Russell 2000 Index. We intend to support the growth of BIPC’s public float to improve the company’s trading liquidity, and recently completed our first initiative in this regard in coordination with Brookfield Asset Management, who agreed to sell a portion of its holdings in BIPC. This successful secondary offering in
Board of Directors Update
After 13 years on the Board of Brookfield Infrastructure, the vast majority as Chairman of the Board, Derek Pannell has stepped down from his current role as Independent Director and will be retiring. Anne Schaumburg, Chair of the Board, stated, “I would like to thank Derek Pannell for his countless contributions to the Board over the past 13 years. His commitment to the success of Brookfield Infrastructure has been invaluable.”
Distribution and Dividend Declaration
The Board of Directors has declared a quarterly distribution in the amount of
Additional Information
The Board has reviewed and approved this news release, including the summarized unaudited financial information contained herein.
Brookfield Infrastructure’s Letter to Unitholders and Supplemental Information are available at www.brookfield.com/infrastructure.
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