Brookfield Renewable Corp Q3 FY2023 earnings call

Key Points - Had a successful quarter utilizing disciplined growth and execution to outperform targets. - Recently closed acquisitions of X-ELIO, Deriva Energy, and advanced acquisitions of Westinghouse Electric and Origin Energy. - Jenny Li provided updates on growth activities, including the acquisition of Banks Renewables, partnership with Axis Energy, and progress on other acquisitions. - Wyatt discussed operating results with FFO growth, strong financial position with $4.4 billion available liquidity, and started share repurchases. - Focused on derisked development, using localized construction, central procurement, and high-quality offtakes to ensure robust cash flows. - Large global pipeline of nearly 150 GW, expecting to deliver 5 GW new capacity this year and ~15 GW over next two years contributing ~$270M FFO annually.

Brookfield Renewable Partners had a strong quarter with FFO of $253 million or $1.29 per unit year-to-date, a 7% increase compared to the previous year. The company's product segments include renewable energy development and operations. Notable acquisitions contributed significantly, such as the full acquisition of X-ELIO, the acquisition of Deriva Energy (formerly Duke Energy Renewables) adding a large renewable platform with ~6,000 MW of operating and development assets, the upcoming acquisition of Westinghouse Electric which adds a leading nuclear technology services provider, and progress on the Origin Energy acquisition. The renewable energy segments' revenue contributions are bolstered by these acquisitions, with the added FFO from new capacity expected to contribute to growth.

Forward-Looking Statements - Aim to deliver 10%-plus FFO per unit annual growth over the decade. - Expect to deliver 5 GW of new capacity this year and approximately 15 GW over the next two years, contributing ~$270 million of additional FFO annually. - Target 12% to 15% long-term total returns for investors while remaining disciplined in capital allocation.

Risks - Renewable sector traded down in public markets due to higher interest rates and perceived margin tightening. - Share price not immune to lower trading environment despite being well-positioned. - Market environment challenges, though the company is insulated but not entirely immune.

Q: Sean Steuart asked about offshore wind growth initiatives and M&A prospects between public and private opportunities.

A: Connor Teskey responded that they are comfortable with a disciplined approach to offshore wind, seeing reduced basis risk and potential eager sellers. He noted private markets have high-quality medium-sized developers with good pipelines lacking scale, and public markets are increasingly attractive with adjusted valuations.

Q: Robert Hope inquired about access to capital and share buybacks.

A: Connor Teskey said they've had an active year in financings and up-financing while maintaining investment-grade metrics. Large acquisitions like Westinghouse and Origin bring their own access to capital. On share buybacks, they view capital allocation as fungible, balancing returns from buybacks and growth.

Q: David Quezada asked about Westinghouse and hydro M&A.

A: Connor Teskey mentioned Westinghouse closes soon, with nuclear fitting into their future plans due to decarbonization, electrification, and energy security drivers. On hydro M&A, they monitor but see less deal activity as less hydro being built, allocating capital based on risk-adjusted returns.

Q: Rupert Merer asked about asset recycling and capital availability.

A: Connor Teskey said there's strong appetite for derisked small to medium-sized assets, with robust bid for such assets globally. Capital availability is strong through Brookfield's funds and institutional co-investors, with examples like Westinghouse showing co-investor demand. On Origin Energy, they noted ACCC approval and increased bid, working to execute the transaction.