No. of Recommendations: 2
Was the BN Q3 report that terrible? What was the catalyst for a 7.5% face plant?I have no clue what caused the price decline! But since you asked, below are a couple of potential candidates to consider.
The Capital Allocation page (Supplemental Info page 8) shows 1.025 billion reinvested into Operating Businesses. Commentary says "$2.8 billion ($1.0 billion during the quarter) was reinvested back into our operating businesses, primarily to opportunistically repay corporate and asset-level debt and to fund investments within our real estate business."
I don't know the details, but at least on the surface it looks like the real estate business isn't doing as well as management claims. Are earnings from the real estate business not enough to cover debt payments? Why else do you need to take 1.025 billion of Distributable Earnings (DE) from elsewhere and use it to pay real estate debt in Q3. The amount is 2.8 billion over the last 12 months to pay down real estate debt. I thought the real estate earnings were enough to cover debt payments until such time the asset is monetized and the debt gets fully paid as part of the sale. How much of DE is truly distributable, if a big chunk is needed to pay down debt, presumably to reduce debt payments, because earnings are not able to cover. I would be less concerned if the reinvestment was to grow the business.
Also, the press release shows 20,623 million revenues in Q3 2024 versus 18,917 million revenues in Q3 2025. That can't be good!
Q3 earnings press release
https://bn.brookfield.com/sites/brookfield-bn-v2/f...Q3 supplemental info
https://bn.brookfield.com/sites/brookfield-bn-v2/f...
