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The Globe and Mail

Brookfield profit, revenue climb on acquisitions

A pedestrian passes by the Republic Plaza Building, which is owned and managed by Brookfield Asset Management Inc., in Denver, Colorado, U.S., on Wednesday, Feb. 24, 2010.

Matthew Staver/Bloomberg

Diversified investment firm Brookfield Asset Management reported Wednesday a first-quarter profit of $570-million (U.S.), up from $409-million a year earlier as the company absorbed a number of recent acquisitions.

Profit attributable to common shareholders, which strips out non-controlling interests with a stake in the company, rose to $278-million or 41 cents per share from a year-earlier $164-million or 25 cents per share.

Total revenue at the Toronto-based asset manager – which reports in U.S. dollars under the International Financial Reporting Standard – shot up to $3.58-billion during the quarter from $3.03-billion in the same period of 2010.

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"We continue to integrate the many investments we made over the past three years and operationally improve returns across our businesses, and we see strong organic growth opportunities across the company," chief executive Bruce Flatt said in a statement.

"Our businesses are generating $4-billion of annual cash flow, and we are well positioned to enhance the performance of our existing portfolio and make new investments where we see value."

Cash flow from operations – a key measure Brookfield uses to evaluate its quarterly performance – declined to $218-million from $230-million when one-time gains were factored out.

Brookfield subsidiaries, which own a range of assets from rail lines in Australia to office towers in Brazil, to hydroelectric power in Canada and the United States, are a bellwether of economic conditions because they're related to larger trends.

Brookfield has been able to capitalize on buying up distressed U.S. assets at discounted prices. Most recently, it took a significant investment in an office property in Washington, D.C. and its investment in General Growth Properties Inc. , a U.S. mall owner that emerged from bankruptcy in November.

The firm announced in January that it was ramping up its stake in General Growth Properties from 27 per cent to 38 per cent, buying up shares from Fairholme Fund in a deal valued at $1.7-billion in shares and cash.

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