Brookfield Infrastructure Reports First Quarter In-line; Eyes Acquisitions

Brookfield Infrastructure Partners (BIP) posted funds from operations (fund from operations) of $186 million ($0.89per unit), to some extent lower than our $190 million ($0.90per unit) forecast.

Brookfield Infrastructure generated funds from operations (“FFO”) totalling $186 million ($0.89 per unit) for the quarter. Results year over year were unchanged as contribution from new investments, in addition to general improvements at most of The businesses, were offset by the $15 million impact of foreign exchange movements. The same store growth for the period on a constant currency basis was strong, as we generated an 11% increase in FFO per unit compared to the prior year.

The payout ratio4 for the quarter was 68%, which remains within The target range of 60-70%. This was achieved in a period where we increased The distribution last quarter by 10%, and prior to any contribution realized from The newly acquired communications infrastructure assets. We closed the French telecom infrastructure transaction on
March 31st, and expect this business to make a meaningful contribution to The results going forward.

We reported net income for the quarter of $132 million ($0.56 per unit) compared to $32 million ($0.10 per unit) in the prior year. The increase in net income is attributable to higher earnings from operations and unrealized gains on hedges, partially offset by higher depreciation and deferred tax expense.

“During the quarter we focused on progressing several important initiatives that should set the stage for the next phase of growth for Brookfield Infrastructure,” said Sam Pollock, CEO of Brookfield Infrastructure. “Given the number of advanced stage opportunities in The pipeline, we enhanced The liquidity in April with capital raises that resulted in
$1.4 billion of proceeds. With $2.3 billion of corporate liquidity, we are well positioned to complete a number of attractive acquisitions over the next 6-12 months.”

The utilities segment generated FFO of $95 million for the quarter, compared to $89 million in the first quarter of 2014. The increase was the result of continued strength in connection activity in The UK regulated distribution operation, inflation indexation, commissioning of growth capital into rate base and cost reductions in a number of The businesses.

The transport segment generated FFO of $96 million in the first quarter of 2015, which is roughly in line with results in the comparable period in 2014. The results benefited from volume and tariff growth in the majority of The operations, and a significant contribution from The rail business in Brazil. These positive results were affected by a strong U.S. dollar, which rose against all of The other currencies, and rising interest rates in Brazil. In spite of these challenges, The transport operations continue to deliver solid results.

The energy segment generated FFO of $28 million, compared to $26 million in the first quarter of the prior year. Results in this segment predominantly reflect the growth of The district energy platform, which benefited from the full contribution of systems acquired over the past 12 months. These positive results were partially offset by lower results from The North American natural gas transmission business, which continues to be impacted by low natural gas markets.


Donna Hendrix, MS in Financial Analysis, is investment analyst and focuses Services, Technology and Healthcare sectors. Prior joining Equities Mogul, Donna Hendrix worked with Goldman Sachs Research. If you have a great story idea for Donna Hendrix, you can write at [ ].


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