Brookfield Business Partners L.P. (NYSE:BBU) Q3 2023 Earnings Conference Call November 3, 2023 9:30 AM ET

Company Participants

Alan Fleming - Head, Investor Relations

Cyrus Madon - Chief Executive Officer

Denis Turcotte - Chief Operating Officer

Jaspreet Dehl - Chief Financial Officer

Conference Call Participants

Gary Ho - Desjardins Capital Markets

Nik Priebe - CIBC Capital Markets

Jaeme Gloyn - National Bank

Operator

Welcome to the Brookfield Business Partners Third Quarter 2023 Results Conference Call and Webcast. As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions]

Now, I’d like to turn the conference over to Alan Fleming, Head of Investor Relations. Please go ahead Mr. Fleming.

Alan Fleming

Thank you, operator and good morning. Before we begin, I’d like to remind you that in responding to questions and talking about our growth initiatives and our financial and operating performance, we may make forward-looking statements. These statements are subject to known and unknown risks and future results may differ materially. For further information on known risk factors, I encourage you to review our filings with the securities regulators in Canada and the US, which are available on our website.

Joining me on the call today is Cyrus Madon, our Chief Executive Officer; Denis Turcotte, our Chief Operating Officer; and Jaspreet Dehl, our Chief Financial Officer. Cyrus will lead off the call today and provide an update on our strategic initiatives. Denis will then provide some perspective on the current operating environment, and Jaspreet will finish with the review of our financial results. The team will be then available to take your questions.

And with that, I’ll pass the call over to Cyrus.

Cyrus Madon

Thanks, Alan. Good morning, everyone and thanks for joining us today. We had a solid third quarter. Adjusted EBITDA increased to a record $655 million, and our adjusted EBITDA margin improved to 19%, which is up more than 100 basis points compared to a year ago. We’re pleased with these results and the continued strength of our business. Our largest operations benefit from stable demand, even in an uncertain environment. And this means, that the volumes and activity levels for the most part have held up across our business. And the progress we’ve achieved on our business improvement plans is contributing to increased margin performance.

Well, higher rates are challenging for many businesses, a flight to credit quality is continuing to provide us with opportunities to refinance our existing borrowings at reasonable costs. In fact, last month, CDK Global, our dealer software and technology services operation re-priced its $3.6 billion term loan at an all-in cost, which was about 50 basis points cheaper than the cost of debt that was replaced. In total, we’ve refinanced nearly a third of our non-recourse borrowings since the beginning of this year, and we’ve done so with effectively no increase to our overall cost of debt.