Cranes reach out to a container ship moored at Asciano Group’s Patrick operations in Sydney, Australia. Brookfield Infrastructure’s takeover of Asciano isexpected to close at the end of August.Ian Waldie/Bloomberg
Brookfield Infrastructure Partners LP said Wednesday it plans to raise its distribution a further 3.5 per cent with several key acquisitions set to close, including its $9-billion Australian ($8.92-billion Canadian) purchase with its partners of Australian port and rail operator, Asciano Ltd.
"We are pleased with our year-to-date financial results, and believe that we are on the cusp of further significant growth," Sam Pollock, chief executive officer of the Toronto-based company, said in a letter to shareholders.
The latest distribution boost brings the company's total increases to 11 per cent from a year ago, in line with the target of 11 to 13 per cent, Mr. Pollock said. The board will review the policy again in the first quarter of 2017. The company also announced a three-for-two unit split to be implemented September 14.
In addition to Asciano, which is expected to close at the end of August, Brookfield recently completed the purchase of Houston-based Niska Gas Storage Partners LLC and a stake in a Peruvian toll-road portfolio. The company deployed $660-million (U.S.) of its own equity for the three transactions, it said, and is plans to commit about $700-million to expand its utilities segment.
Brookfield is in exclusive talks to acquire a natural-gas transmission company from Petrobras in Brazil, where it expects to invest a minimum of $700-million into a consortium alongside its institutional partners, it said.
"Over the past year, we have been evaluating a number of exceptional opportunities across various sectors in Brazil," Pollock said. "While the country is experiencing political turmoil and a severe economic downturn, it is an economy with significant growth potential, solid underlying fundamentals and a strong democratic regime that is well-positioned for a good recovery in the medium term."
Mr. Pollock said the company was also on the look out for "mispriced opportunities" in the fallout from the Brexit vote in June.
Brookfield Infrastructure, the publicly traded infrastructure arm of Brookfield Asset Management Inc., has also been a seller in recent years as the competition for real assets heats up. It sold its European gas distribution business in the second quarter and its Ontario transmission business in the second half of 2016.
In total, the company said it expects to raise $1.1-billion for the divestitures.
"Over the past several years, we have successfully monetized eight investments for proceeds that exceeded $2-billion, generating returns on equity that are greater than 25 per cent," Pollock said.
Pollock said he expected a further $500-million to $1-billion in assets sales on an annual basis for at least the next three years.
Brookfield Infrastructure reported Wednesday net income grew 767 per cent to $156-million or 59 cents a unit in the second quarter from a year ago. Funds from operations grew 11 per cent to $230-million, or $1 a unit, sightly missing the average $1.02 estimate of analysts' compiled by Bloomberg.