• Funds from Operations (FFO): $278 million for the quarter, or $0.42 per unit, up 11% year-over-year.
• Asset Monetizations: Generated approximately $2.3 billion in proceeds, with returns of 2.5 times invested capital and IRRs greater than 20%.
• Equity Deployment: Over $11 billion committed and deployed into growth year-to-date.
• Available Liquidity: $4.6 billion at the end of the quarter.
• Hydroelectric Contracts: Executed contracts at an average price of almost $90 per megawatt hour for an average duration of almost 15 years.
• Financing Activities: Expected to execute a total of $30 billion in financing this year, generating $700 million in total financings.

• Warning! GuruFocus has detected 11 Warning Signs with BEPC.

Release Date: November 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Brookfield Renewable Corp (NYSE:BEPC) delivered record funds from operations for the third quarter, benefiting from asset development, recent acquisitions, and strong pricing.
• The company has a diversified business across attractive global power markets, focusing on low-cost mature technologies.
• Brookfield Renewable Corp (NYSE:BEPC) has a robust pipeline of renewable power projects, with approximately 90% located in top data center markets globally.
• The company successfully monetized assets, generating approximately $2.3 billion in proceeds with returns of 2.5 times the invested capital and IRRs greater than 20%.
• Brookfield Renewable Corp (NYSE:BEPC) has a strong balance sheet with $4.6 billion in available liquidity, supporting its growth activities and asset recycling initiatives.

Negative Points

• The company faces potential risks from regulatory changes and subsidy adjustments, although it claims to be largely insulated.
• There is a bifurcation in the market, with high-quality, de-risked assets receiving strong bids, while businesses with ongoing capital needs face capital scarcity.
• Brookfield Renewable Corp (NYSE:BEPC) acknowledges the challenges in offshore wind investments due to long lead times and capital outlays.
• The company is exposed to market volatility, which could impact its ability to deploy capital and execute asset sales.
• Brookfield Renewable Corp (NYSE:BEPC) must navigate potential changes in US tax policy and political shifts that could affect its operations and growth outlook.

Q & A Highlights

Q: Can you provide more detailed thoughts on the US return profile and growth potential if tax credits are changed or repealed? A: Connor Teskey, CEO, explained that government support and regulatory processes generally have strong bipartisan support, and any changes are not expected to be material. The focus on domestic growth should increase power demand, benefiting renewables. Brookfield Renewable has positioned its business to rely on corporate demand and low-cost energy production, not government subsidies, ensuring resilience against regulatory changes.

Q: What are Brookfield Renewable's larger growth aspirations in offshore wind? A: Connor Teskey, CEO, expressed bullishness on offshore wind, describing it as a large, fast-growing asset class critical in many markets. The partnership with rsted is seen as a strategic move, and Brookfield Renewable is open to more opportunities in offshore wind, given the attractive risk-return profile currently available.

Q: How do potential changes in US tax policy impact different asset classes, and which has the best cost outlook regardless of subsidies? A: Connor Teskey, CEO, stated that onshore wind and solar are the cheapest forms of electricity production, even without subsidies. Any reduction in tax credits would likely result in higher PPA prices to preserve returns. Higher-cost sectors reliant on subsidies might be more exposed, but Brookfield Renewable's focus on low-cost technologies provides insulation.

Q: How does Brookfield Renewable view non-renewable power investments like Infinium? A: Connor Teskey, CEO, explained that while renewables remain the core focus, Brookfield Renewable selectively invests in asset classes critical to future clean energy grids, such as nuclear, batteries, and biofuels. Investments like Infinium are evaluated against the robust returns from renewables, ensuring significant rewards for any additional risks.

Q: What is the impact of the US election on M&A and asset valuations in the US market? A: Connor Teskey, CEO, noted that the election outcome is not expected to materially impact Brookfield Renewable's asset sales, which are heavily contracted and derisked. However, reduced access to capital for some market participants could increase investment opportunities for Brookfield Renewable.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.