Brookfield Renewable (NYSE:BEPC) reported record third-quarter funds from operations as newly commissioned projects and asset sales helped lift results, while management said it expects full-year earnings growth to meet or exceed its long-term targets.
The renewable power company generated funds from operations, or FFO, of $346 million, up 15% from a year earlier. FFO per unit rose 11% to $0.51, CEO Connor Teskey said on the earnings call.
Brookfield commissioned 2.5 gigawatts of capacity during the quarter and signed power purchase agreements covering another 1.6 gigawatts of projects. Teskey said the company remains on track to reach an annual commissioning run rate of 10 gigawatts by 2027.
For the past 12 months, FFO totaled $1.49 billion, or $2.18 per unit, up 15% and 12%, respectively, from the comparable period a year earlier. Brookfield ended the quarter with $5.1 billion of liquidity.
Asset Sales Support Results and Growth
CFO Patrick Taylor said quarterly results benefited from long-term contracts, inflation-linked revenue, newly commissioned assets and the company’s expanding asset recycling program. Brookfield has agreed to or closed sales since the end of the second quarter that are expected to generate approximately $2.8 billion in proceeds, including $850 million net to Brookfield Renewable Partners, or BEP.
Those transactions included the sale of Brookfield’s remaining 25% interest in a Maine hydro portfolio, the final portion of an approximately 2.1-gigawatt renewable portfolio sold to Northview Energy, and smaller asset sales in Colombia. Brookfield also sold its investment in Indian renewable platform Avaada for approximately $570 million, or $125 million net to BEP.
Teskey said returns on asset recycling over the past 12 to 18 months averaged in the mid-to-high teens, above the high end of the company’s 12% to 15% total return target. Taylor said management has a high level of confidence in its ability to continue delivering such returns, citing flexibility across markets, technologies and transaction types.
Hydroelectric operations generated $214 million of FFO, with asset-sale gains helping offset weaker water conditions in Ontario and Colombia. Taylor said drier conditions associated with El Niño affected Colombia’s Isagen business but described the overall impact on Brookfield’s quarterly results as relatively modest.
Battery Storage and Nuclear Expansion
Brookfield closed its acquisition of renewable power platform Boralex during the quarter and completed its purchase of North American battery storage platform Aypa after quarter-end. Teskey said Aypa has since signed three power purchase agreements totaling approximately 900 megawatts, at or above Brookfield’s underwriting expectations.
Battery storage could account for between one-third and one-half of Brookfield’s expected 10-gigawatt annual commissioning run rate in 2027, Teskey said. He added that the company is increasingly developing batteries under long-term take-or-pay or capacity contracts rather than relying on merchant power prices.
At nuclear business Westinghouse, Teskey highlighted a September framework agreement involving the U.S. federal government and South Korea. The agreement contemplates up to $120 billion of Korean investment to support eight reactors on U.S. federal sites, including six Westinghouse AP1000 reactors and two Korean APR-1400 reactors. The framework remains subject to final negotiations.
Taylor said year-to-date adjusted EBITDA at Westinghouse’s operating plants business rose more than 20%, reflecting demand for nuclear fuel and services.
Simplification Vote Extended
Brookfield extended the voting deadline for its proposed combination of BEP and Brookfield Renewable Corporation, or BEPC, into a single listed corporate entity to November 25, 2026. Taylor said BEPC shareholders approved the transaction on October 14, but completion remains conditional on BEP investor approval.
Although 99.7% of votes cast by BEP unitholders had supported the proposal, Taylor said participation remained below the required threshold of two-thirds of eligible units. He said the company was continuing outreach to retail and institutional investors.
Brookfield targets FFO-per-unit growth of more than 10% and annual distribution growth of 5% to 9%. Taylor said the company would likely remain toward the lower end of the distribution-growth range as it pursues investment opportunities and works to reduce its payout ratio.
About Brookfield Renewable (NYSE:BEPC)
Brookfield Renewable Corporation (NYSE: BEPC) is a renewable power and sustainable solutions company that provides investors with an interest in the Brookfield Renewable platform. The company owns and operates a diversified portfolio of renewable energy assets and is part of Brookfield Asset Management’s global renewable power business.
Its activities include the development, ownership and operation of hydroelectric, wind, solar and distributed energy facilities, as well as energy storage and other renewable power infrastructure.
