Brookfield Renewable announces 2012 third quarter results
Friday, Nov 09, 2012Brookfield Renewable Energy Partners L.P. (TSX:BEP.UN) ("Brookfield Renewable") - All amounts in U.S. dollars unless stated otherwise
Brookfield Renewable Energy Partners L.P. today announced its results for the three and nine months ended September 30, 2012.
"Almost a year has passed since the launch of Brookfield Renewable Energy Partners and it has been tremendously successful. We have expanded our asset base by more than 600 MW while lowering our funding costs and increasing our distributions to unitholders," said Richard Legault, President and CEO of Brookfield Renewable.
"While our financial results in 2012 have been well below expectations due to unfavourable hydrological conditions, we can confidently say we have accomplished our first year objectives and with the support of our investors, created a company whose portfolio, operating platform and financial strength make it one of the leading renewable businesses worldwide. We remain very well positioned to build on these achievements in 2013."
Review of Operations
Generation for the third quarter of 2012 was 2,971 GWh as compared with 3,614 GWh in the same quarter of 2011 and a long-term average of 4,049 GWh. This was primarily due to lower inflows across our hydroelectric portfolio in eastern Canada, New York state and the mid-western United States. The variance in year-over-year results also reflects above average precipitation and record rainfall in 2011 which impacted the mid-western and eastern United States. Despite the shortfall, reservoir levels on a portfolio basis are in line with long-term average levels for this time of year.
Generation from wind facilities increased 208 GWh year-over-year due to the contributions from new wind facilities in California, New England and Ontario. Results were below long-term average for the current period primarily due to lower than expected wind conditions across the U.S. and Canada.
For the third quarter of 2012, funds from operations were $11 million ($0.04 per unit) as compared with $101 million ($0.39 per unit) on a 2011 pro forma basis, reflecting the lower generation levels discussed above. The decrease in generation affected assets in markets where power purchase agreement prices are higher than our average price, which had a disproportionate impact on adjusted EBITDA and funds from operations.
For the first nine months of 2012, generation was 11,889 GWh as compared to 12,029 GWh for the first nine months of 2011 and 13% below the long term average. Funds from operations were $273 million ($1.04 per unit) as compared with $381 million ($1.45 per unit) on a 2011 pro forma basis.
During the third quarter, we moved forward with a comprehensive plan to integrate a 378 MW hydroelectric generating portfolio consisting of four generating stations located in Tennessee and North Carolina. The acquisition, which was announced in June 2012, has obtained major regulatory approvals and is expected to close by the end of this year.
Construction activities at all three of our hydroelectric development projects are proceeding on scope, schedule and budget. At the 45 MW Kokish River site, clearing and excavation was completed at the intake and powerhouse sites, and the first kilometre of the project's nine kilometre penstock has been installed. The two facilities in Brazil totalling 48 MW are nearing completion and are scheduled to enter commercial operation in the first quarter of 2013.
Financial Position and Liquidity
Total liquidity as at the date of this release is approximately $1.0 billion, consisting of cash and cash equivalents and undrawn amounts from our revolving credit facilities. Liquidity increased from September 30, 2012 due to our recently completed preferred share issuance.
Despite the recent low generation levels, with cash on hand and operating cash flows we have continued to invest in multiple growth initiatives while maintaining unitholder distributions and sustaining capital expenditures. The ability to do so without increasing the amounts drawn on our credit facilities demonstrates the financial resilience of Brookfield Renewable's operations and its ability to mitigate the impact of short-term generation shortfalls on our funds from operations.
Subsequent to quarter-end, Brookfield Renewable completed the issuance of C$250 million of preferred shares, as well as C$175 million in project financing for the Kokish River hydroelectric project.
The Board of Directors has declared a quarterly distribution in the amount of US$0.345 per unit, payable on January 31, 2013 to limited partnership unitholders of record as at the close of business on December 31, 2012. The regular quarterly dividends on the Brookfield Renewable Power Preferred Equity Inc. Series 1 and Series 3 preferred shares have also been declared.
Information on the limited partnership unit distributions and preferred share dividends can be found on Brookfield Renewable's website at www.brookfieldrenewable.com under Investor Relations.
Distribution Reinvestment Plan
Brookfield Renewable maintains a Distribution Reinvestment Plan ("DRIP") which allows holders of its limited partnership units who are resident in Canada to acquire additional units by reinvesting all or a portion of their cash distributions without paying commissions. Information on the DRIP, including details on how to enroll, is available on Brookfield Renewable's website at www.brookfieldrenewable.com/