The company reported a 5.6% revenue increase driven by strategic acquisitions and ongoing long-term contracts. A big win for a 10.5GW agreement highlights the firm’s ability to secure large customers.
The firm is also planning to bring 7,000MW of new renewable capacity online in 2024 to further support the high yield and recent 5.2% payout increase.
Additional future developments include further diversifying its energy portfolio by adding nuclear power to its renewable energy assets.
BROOKFIELD RENEWABLE PARTNERS L.P., (Toronto symbol BEP.UN; www.bep.brookfield.com) owns 238 hydroelectric generating stations, 181 wind farms, 220 solar facilities, and 6,925 distributed generation and energy storage sites.
Brookfield cuts risk by selling power from its plants under long-term contracts. That provides stable cash flows.
For instance, the company in 2022 signed a 40-year power purchase agreement with Hydro Quebec for its 265-megawatt Lievre hydroelectric facilities.
The company has also teamed up with Cameco Corp. (Toronto symbol CCO) to acquire nuclear power plant operator Westinghouse Electric Company. They paid $7.88 billion U.S. for the facility. Brookfield owns 51% of the partnership, with Cameco holding a 49% stake.
[ofie_ad]
In the first quarter ended March 31, 2024, Brookfield’s revenue rose 5.6%, to $1.13 billion from $1.07 billion a year earlier (all amounts except unit price and market cap in U.S. dollars). Its cash flow rose 7.6% to $296 million, or $0.45 a unit, from $275 million, or $0.43, a year earlier.
Dividend Stocks: 10.5 GW deal with tech leader expands global capacity
Brookfield recently signed an agreement with Microsoft Corp. to deliver more than 10.5 gigawatts of additional renewable energy capacity to power its AI cloud services business.
During the quarter, it secured contracts to deliver approximately 5,200 gigawatt hours per year of generation. That’s on top of the deal with Microsoft. It expects to bring 7,000 megawatts of new renewable capacity online in 2024.
The deal is almost eight times larger than any other single corporate power-purchase agreement, and it may later be expanded to include new renewables capacity in Asia and Latin America.
The huge demand for power from Microsoft reflects surging demand for electricity to power the datacentres needed for burgeoning artificial intelligence applications.
The cost to build the new capacity could be as much as $11.5 billion. But Brookfield will be able to draw on its 60% owner, and leading investment firm, Brookfield Asset Management, for construction funds and expertise.
With the March 2024 payment, Brookfield raised your quarterly distribution by 5.2%. The new annual rate of $1.42 U.S. a unit yields a high 5.4%. The partnership aims to raise the annual payment by 5% to 9% each year.
Recommendation in Canadian Wealth Advisor: Brookfield Renewable Partners L.P. is a buy.
