NYSE:BIP - Post Discussion
Post by
retiredcf on Feb 02, 2023 9:24am
RBC
Brookfield Infrastructure
Quick Take: Results match our forecast; 6% distribution increase fairly close to our estimate
NYSE: BIP | USD 34.45 | Outperform | Price Target USD 47.00
Sentiment: Neutral
Our take
With the Q4/22 results matching our forecast and the 6% distribution increase to a new annualized rate of $1.53/unit coming in fairly close to our estimate of $1.56/unit, we do not expect the results and distribution increase to materially impact BIP's unit price. Instead, we expect the direction of the unit price will more likely be a function of BIP's outlook, and in particular its pursuit of acquisitions, some of which appear to be very large, as well as the prospects for asset monetizations.
Details
Q4/22 FFO matched our forecast. BIP's FFO/unit in Q4/22 matched our forecast of $0.72 and consensus of $0.72 (seven estimates; range of $0.71-0.73). From a segment perspective, FFO was as follows:
• Utilities FFO was $188 million compared to our forecast of $192 million and $167 million in Q4/21;
• Transport FFO came in at $207 million versus our estimate of $209 million and Q4/21 FFO of $185 million;
• Midstream FFO was $205 million compared to our forecast of $194 million and FFO in Q4/21 of $183 million; • Data FFO came in at $61 million versus our estimate of $63 million and $60 million in Q4/21; and
• Corporate FFO was ($105) million compared to our forecast of ($103) million and Q4/21 FFO of ($109) million.
Distributions increased by 6%. BIP announced a 6% increase in its distribution to a new annualized rate of $1.53/unit, which is fairly close to our estimate for an increase in the distribution to $1.56/unit.
Evaluating several new growth opportunities. BIP noted that it has "replenished" its investment pipeline and in addition to evaluating "several" corporate carve-outs, a "large component" of its investment pipeline is comprised of public-to-private opportunities.
Capital recycling likely to continue to play a key role this year. On the asset monetization front, BIP is focused on closing the sale of its Indian toll road portfolio and the sale of its 50%-owned port in Australia (at a 30x 2022 EBITDA multiple). The partnership expects the transactions to close in H1/23 for $260 million of proceeds (net to BIP). With respect to potential future asset sales, BIP noted that it has launched the next round of asset sales that it believes should generate over $2 billion in proceeds (net to BIP) in 2023.
Conference Call: Today at 9:00 AM (ET)
Be the first to comment on this post