Brookfield reports Q1 loss despite improving EBITDA

• Brookfield Business Partners (TSX:BBU.UN) reported a net loss of approximately C$177.92 million in the first quarter of 2020
• Brookfield attributes the steep loss to unrealised devaluations on its financial assets, as well as impairments charges
• Despite the loss, the company’s EBITDA was approximately $415.14 million, around $42.36 million more than in 2019’s same quarter
• Due the COVID-19 pandemic’s impact on global markets the company is now working to maximise its liquidity and is cautiously considering new investment opportunities
• Brookfield Business Partners (BBU.UN) is down 3.27 per cent, with shares trading for $40.48 and a market cap of $6.06 billion

Brookfield Business Partners (TSX:BBU.UN) has reported significant losses in the company’s first quarterly report of the year.

In the quarter ending March 31, Brookfield generated a net loss of approximately C$177.92 million, compared to net earnings of $87.55 million in 2019’s same period.

Brookfield attributes the steep decline to impairments and unrealised losses on its financial assets.

However, the unrealised losses have not impacted the company’s quarterly EBITDA, which was approximately $415.14 million. This is approximately 42.36 million more than in 2019’s same quarter.

Cyrus Madon, CEO of Brookfield Business Partners, said the impact of the COVID-19 pandemic has dramatically altered the global economic landscape. 

“Although we are planning for a very weak business environment through the rest of the year, BBU has substantial liquidity and businesses that are high-quality providers of essential products and services.

We are well positioned to manage through an expected period of severe economic disruption,” he said

Cyrus went on to say that the company is working to maximise its liquidity and is cautiously considering new investment opportunities.

At the end of the previous quarter Brookfield had approximately $2.82 billion in liquid assets. This included around $340.3 million in cash and the remainder in undrawn credit.

Brookfield’s companies also retain around $5.65 billion, collectively, to self-fund through the economic downturn.

Since the pandemic’s economic impact began to hit the market in late February, Brookfield’s market share has fallen more than 30 per cent.

The company did not provide an outlook or guidance with its first quarter report.

Brookfield Business Partners (BBU.UN) is down 3.27 per cent, with shares trading for $40.48 at 1:58pm EDT.