Brookfield Asset Management Inc. saw a big drop in net profit in the second quarter as the Toronto-based conglomerate recorded sharply lower contributions from some of its major holdings.
The global alternative asset manager with more than $150 billion in assets under management, said net income attributable to common shareholders in the three months ended June 30 was US$138 million or 17 cents per diluted share.
That was down from $838-million (U.S.) or $1.26 per diluted share in the comparable 2011 period even as revenue grew to $4.29-billion from $3.96 -billion.
Among the factors was a drop in equity accounted income to $258 -million from more than $1-billion, mostly because big valuation gains in the 2011 quarter were not repeated in 2012.
A Brookfield spokesman said valuation gains totalled $665-million in the year-ago period, including a gain of $499-million in the value of its office properties.
The prior-year numbers also included a $60-million gain on the sale of an asset in its private equity portfolio.
In 2012, the total quarterly gain in valuation was $110 -million. That included gains of $198-million on office properties offset by writedowns on Brookfield's renewable power and infrastructure assets.
"During the last few months we completed a record number of acquisitions, and despite market volatility, most of our operations achieved solid performance," CEO Bruce Flatt said in a statement.
Brookfield, which owns and operates assets focused on property, renewable power, infrastructure and private equity, says its key performance metric is funds from operation, which measures cash generated from assets, rather than profit.
In the latest period, FFO were $244-million, down from $309 -million in the 2011 period, mainly as a result of low rainfall in North America which weighed on results from its renewable power business.
On the Toronto Stock Exchange, Brookfield Asset shares were down a penny at $34.24 in trading Friday morning.