By Robb M. Stewart

Brookfield Asset Management's flagship renewable-power arm expects opportunities to grow in an environment of strong demand but weak market sentiment.

"The fundamentals for energy remain strong as investment in digitalization and re-industrialization is driving demand growth that far exceeds supply. This imbalance persists despite weaker market sentiment due to uncertainty of the impacts of tariffs globally," said Connor Teskey, chief executive of Toronto- and New York-listed Brookfield Renewable Partners.

Teskey said Brookfield Renewable's balance sheet, resilience and strategic positioning will allow it to capitalize on the current market bifurcation through the acquiring and monetizing of assets. Still, the company acknowledged that amid elevated uncertainty investors are reacting to tariff news, and that they aren't discerning between renewable-energy companies that are diversified and capable of mitigating the potential fallout of a changed trade backdrop, and those that aren't.

Reporting earnings for the first quarter, Brookfield Renewable said that while most investors are focused on incremental risks they are seeing in the market today, the current uncertainty is creating an opportunity for those that are well positioned to extend their leadership position.

The company said public-market valuations for renewable-energy companies have trended significantly lower in recent months, even as fundamentals for energy demand are strong and meeting the demand requires capital. This is driving incumbent utilities and traditional energy providers to refocus on core businesses or seek scale through capital partnerships, Brookfield said.

During the quarter, the company reached an agreement to buy National Grid Renewables, a U.S. onshore renewable power operator and developer with 3,900 megawatts of operating and under construction assets and a more than 30,000-megawatt development pipeline. It also bought the remaining outstanding shares of French renewable-energy developer Neoen.

Brookfield Renewable's net loss attributable to unitholders widened to $197 million, or 35 cents a unit, in the first quarter from $120 million, or 23 cents, a share a year earlier. Direct operating and management-service costs rose for the quarter, and the company's interest expense increased.

Funds from operations rose for the three months to $315 million, or 48 cents per unit, from last year's $296 million, or 45 cents per unit. Revenue increased to $1.58 billion from $1.49 billion.

Brookfield Renewable said it continues to target 10%-plus funds from operations per-unit growth in 2025.

In the latest quarter, its hydroelectric segment delivered funds from operations of $163 million. Its wind and solar segments generated $149 million of funds from operations, which it said reflected newly commissioned capacity and the closing of the investments in Neoen and in Oersted's 3,500-megawatt operating offshore wind portfolio in the U.K.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

May 02, 2025 08:15 ET (12:15 GMT)

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