Q4 2020 Brookfield Business Partners LP Earnings Call
[music].
Welcome to the Brookfield business partners fourth quarter 2020 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 and opportunity to ask questions to join the question queue simply press star and one on your Touchtone phone.
Should you need assistance during the call you may signal, an operator by pressing star and zero and now I'd like to turn the conference over to Alan Fleming, Vice President of Investor Relations. Please go ahead Mr. Fleming.
Thank you and good morning, welcome to Brookfield business partners, 2024th quarter Conference call.
And we begin I'd like to remind you that and 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 would encourage you to review our filings with the securities regulate.
And Canada, and the U S, which are available on our website.
On the call with me today is Cyrus Madden, Chief Executive Officer, Denis Turcotte, Chief operating Officer, and Jeffrey Doyle, Chief Financial Officer, I will turn the call over to Sarah to provide and update on our business and then Dennis will discuss recent activities at Westinghouse Jesper will finish with a review of our annual financial results will then be.
Able to take your questions and with that I'll pass the call over to Cyrus.
Thanks, Alan and good morning, everyone. Thanks for joining us on the call today.
I thought I'd start with some high level comments on our operations and then give you an overview on some of the initiatives we've been focused on.
2020 was a busy year for us and that would have been hard to imagine back in March <unk>.
During the year, we committed about three $5 billion of capital $1 3 billion of that came from B B U to acquire new businesses and to increase our ownership and business as we already on like Sei Jin.
We generated more than a just over $1 billion from distributions.
And sales of mature businesses and BB as share of that is about $550 million.
And.
We're really pleased to tell you that our operations demonstrated great resilience last year over the last few years, we've been very deliberate around where we invest our capital.
Many of our largest business is today, our market leading providers of essential products and services.
These businesses were virtually unaffected by the global economic shutdowns during the year and those that were impacted recovered strongly as the year progress.
We own about the same number of business today as we did five years ago, but the profile of <unk> is very different today most of our profitability comes from businesses that have scale and generate stable cash flows.
Put this in perspective.
Four of our largest companies today, sage and Westinghouse and <unk> and BR cambium channel generate more than 10 times, the EBITDA of our largest for companies and 2016.
As we've improved the quality of our overall business. We've also improved the resilience of <unk> intrinsic value.
Which is the present value of the cash flows are businesses will generate and the future.
Most companies around the world our near term cash flows were impacted over the past year, yet our long term cash flows and terminal values were largely unscathed, given the resilience of our largest businesses, which means theres been very little impact to <unk> overall intrinsic value.
And as we continue to grow our business, we expect our intrinsic value per unit will continue to increase.
The strong cash flows generated by our largest businesses also provide us recurring distributions that we used to fund our growth.
As an example at.
And at year, and Westinghouse paid of $265 million dividend of which <unk> received a $115 million later, Dennis is going to talk more about what's going on at Westinghouse.
But I'll just say this continues to be a phenomenal investment for us and.
And about two and a half years and.
<unk> with no increase to westinghouse's debt levels.
<unk> has received more than $370 million and dividends, which is nearly all of our initial equity investment.
And two and a half years ago Westinghouse truly is a great cash generator.
<unk> is another highly cash generative business, which has reliably made distributions to shareholders over the years and should support strong distributions to be bu for years to come.
October we made an offer to acquire the publicly held shares of stage and we don't already own for about book value.
Privatizing Sage and will provide us more opportunities to improve the returns we earn on our capital.
We're in the process of exploring opportunities to optimize <unk> capital structure with the low interest rate environment today, and strong appetite for debt of high quality issuers, it's likely that <unk> will not have to fund all of the privatization of investment we had originally anticipated.
Now the amount we end up funding will depend on how receptive capital markets are.
And.
Making sure that we're able to maintain safe and strong credit ratings, which is critically important to us and the company's customers.
We expect the transaction to close and the first half of this year, which will increase <unk> ownership to about 40%.
And January.
We acquired <unk>. This is a business process outsourcing company, which specializes and managing customer relationships for a large mostly U S base health care and technology clients and we like this business because it operates at the intersection of the attractive healthcare Tech.
Knowledges and services sectors, and we've identified opportunities to help grow this business.
<unk> expects to fund $85 million of the investment for an approximate 35% ownership interest.
As Youre aware.
Early last year, alongside our institutional partners, we invested about $600 million and the public securities of businesses that were trading at significant discounts.
And to their intrinsic value.
And the prices of these securities have increased by about 150%.
And resulted in a gain to be Bu, a $300 million during the fourth quarter, we sold about 10% of our investment and crystallized a $21 million gain to be Bu.
The price of <unk> shares has also increased with an improving outlook for global steel demand.
So during the fourth quarter and in January we sold $45 million graft tech shares and generated $220 million of proceeds from <unk>.
With these sales completed <unk> will hold a 17% interest and gracia.
So with 2020 now and the rearview mirror.
We are really excited about the days ahead.
Private market transaction transaction activity continues to pick up.
And we are working on a strong acquisition pipeline of high quality business and add ons to continue growing the business as we own today.
With that I'm going to hand, it over to Dennis.
Thanks, <unk> good morning, everyone. Our business operations team has worked hand in hand with each of our operating companies over the last year to keep our employees safe healthy and to manage through the challenging environment continuing to advance the transformation plans in place with each of our businesses.
We're proud of what our team has accomplished and nowhere are these achievements more evident than on Westinghouse, which is and a stronger position today than at any point since we acquired the company and 2018.
And as many of you know with Westinghouse is our global service provider to the nuclear power industry.
The business plays a critical role in ensuring the safe and uninterrupted operation of customers' power facilities. The majority of the company's profitability is generated from regularly recurring plant and refueling maintenance outages and ongoing operating improvement initiatives, while we saw some deferral of non critical maintenance work.
Demand for Westinghouse and services has been largely unaffected over the last 12 months and at Cyrus mentioned earlier the business continues to generate a lot of free cash flow to support distributions up to <unk>, while still reinvesting in the business and a broad base of technologies to maintain its industry leading position.
We've made good progress over the last 12 months working with Westinghouse to advance its transformation agenda. We've continued to focus on optimizing manufacturing supply chain and G&A costs, while standing up a global shared services organization that benefits from leveraging economies of scale and regional advantages.
We've also revamped Westinghouse and the technology and the innovation roadmap with a focused on digitalization initiatives to improve the cost position of the company and our positioning to provide unique digital products and services to its customers.
Westinghouse has closed four bolt on acquisitions and the last 18 months that were all strategically important bringing advanced technical and service capabilities to the business.
These have augmented core engineering and service capabilities added new digital products and services to its portfolio and have increased its presence and the attractive Canadian nuclear services market.
Westinghouse has been able to execute these acquisitions at accretive EBITDA multiples and continues to build.
And review a strong pipeline of actionable targets in core and adjacent markets. Several of these opportunities could be relatively sizable.
Westinghouse is also developing leading carbon free technologies to support the transition to distributed energy.
Small modular and micro reactors represent a significant growth opportunity to bring clean reliable energy to remote areas and industrial applications, given the growing interest and all markets for zero carbon energy.
Westinghouse's micro reactor is designed to provide competitive power with minimal maintenance and its small size allows for standard transportation methods and rapid on site deployment.
In October Westinghouse has established a partnership to support Canadian government efforts studying modular and micro applications as part of its goal to achieve and net zero, Canada by 2015.
Westinghouse's run rate EBITDA is now $650 million annually and we feel quite confident that we'll be able to achieve our target EBITDA of $7 million to $800 million over the long term through ongoing operational improvements and the benefits from our recent add on acquisitions.
With that ill hand, it back to Jeff Sprague.
Dennis and good morning, everyone.
<unk> touched on our business performance has been extremely resilient this year.
<unk> generated company EBITDA of one 4 billion compared to one 2 billion and 2019.
Company asset flow.
Excluding benefit.
Position increased to $792 million or $5 and 28.
Unit.
<unk>, two $764 million or $5 45 per unit in 2019.
The increase in 2020 company EBITDA reflects the contribution of recently acquired businesses in our business services and infrastructure services segment. This was partially offset by reduced contributions from our industrial segment.
Within our business services segment, we generated company EBITDA of 271 million and.
Increase of 22% compared to 2019.
<unk> contributed strong company EBITDA of $128 million.
Results.
Benefited from significant new underwriting activity and low levels of mortgage default supported by the strength of the Canadian housing market.
At health scope, we generated company EBITDA of $67 million in 2020.
With the easing of restrictions on elective surgeries and Australia activity levels at health scope hospitals have returned to normal.
The business continues to operate and an elevated cost environment.
In November <unk>.
The sale of its pathology business and New Zealand.
<unk> $390 million were used to.
And to pay down debt that helps.
Moving on to multiplex, which reported company EBITDA of $6 million for the year.
Following the impact of economic shutdowns and restrictions at customer sites and 2020 construction activity levels across Multiplexes project site have improved.
In Australia operations have fully recovered to pre shutdown level.
In the U K construction has been deemed an essential service and project sites remain open during the latest round of lockdown restrictions.
Bidding activity is also gradually improving multiplex signed $900 million of work in the fourth quarter ending the year with a backlog of $5 6 billion.
And going to now move to our industrial segment, where we generated company EBITDA of $604 million this year, which is 2% below 2019.
<unk> performed very well and reported $390 million of company EBITDA.
Total volume this year declined 4% compared to 2019.
Battery demand recovered strongly and the second half of the year.
At <unk>, we generated company EBITDA of $163 million for the year.
Despite the impact of reduced sales volume and graphite electrode pricing the company generated meaningful cash flow during the year and paid down approximately 400 million of death.
<unk> performance remained resilient throughout 2020, given the essential nature of water and wastewater services that it provides.
The company is working to integrate its newly acquired concession.
<unk> the city of one 5 million and half again and.
And expects to begin producing services and Mi and mid 2021.
And finally, our infrastructure services segment generated company EBITDA of $602 million in 2020 and increase of 29% compared to 2019.
Company EBITDA during the year was supported by the addition of Brad safely, which we acquired in January 2020.
Brian Steve Free contributed 74 million.
Performance of the business has been impacted by the reduced activity levels and delayed project starts as a result of the economic shutdowns during the day here.
Actively reviewing M&A opportunities in the current environment, and then December Brian and Steve.
And add on acquisition in Texas and and.
Now the largest commercial work axes provider and the region.
Westinghouse reported company EBITDA of $284 million and contributed strong performance throughout the year.
Execution on new client projects and strong cost management more than offset the limited impact of maintenance deferrals at customer site.
Altera and infrastructure contributed higher company EBITDA and 2020, primarily due to BV use increased ownership.
Overall revenues remained relatively stable, while the business continues to operate and and challenging environment for oil producing customers, which has impacted performance and the <unk>.
And Fps those segments of the business.
And the shuttle tanker operations and Altera continue to performed performed well in 2020.
And in conclusion, I, just wanted to touch on our liquidity.
We ended the year with approximately $2 5 billion of liquidity at the corporate level. This includes approximately $550 million of cash and liquid securities and approximately $2 billion of availability on our credit facility.
We remain extremely confident that we can more than we have more than enough liquidity to continue to fund the growth and supports our business on an ongoing basis.
With that.
And going to wrap up my comments and I'll pass the call back over to the operator for questions.
And certainly ladies and gentlemen, if you have a question at this time. Please press Star then one on your Touchtone telephone. If your question has been answered and if you'd like to remove yourself from the queue. Please press the pound key.
First question comes from the line of Devin Dodge from BMO capital markets. Your question. Please.
Alright. Thank you good morning, everybody.
And with it.
And just can I start with a question on capital deployment.
We're clearly in a period and there's lots of M&A activity I think the release mentioned that new investment activity from Veeva you continued to.
To accelerate just can you walk us through that pipeline and where you're seeing the most opportunities.
Sure look it's.
It's really broad based Stephan.
And just put a little color around that and North America and Europe, we are seeing fairly large scale opportunities across let's say business services broadly and industrials.
What we are seeing more of is more technology service opportunities as well and this would be globally.
I think having closed on ever rise and now doing more work there, it's just giving us a.
Different aperture than we had before on this type of opportunity and by the way, we think there's enormous growth potential within <unk> itself, but we're starting to see a lot of tech service opportunities and <unk>.
Probably that'll be.
Over the medium term and area of growth for us.
And we're seeing a couple of rescue type opportunities as well like notwithstanding the fact that.
Markets are very very strong there are still some struggling companies around the world that need capital quickly, so pretty broad base and but I would tell you. It's very active and every one of our regions. Our teams are actively looking at things.
Okay. That's a that's a good rundown and thanks for that maybe.
Maybe just switching gears over to to Westinghouse.
I mean Dennis gave.
Good update there just wondering like this business.
And to be migrating towards being one of your mature investments if it isn't there already just in terms of positioning Westinghouse from potential sales do you think.
Or do you feel that there's more work to be done around tuck in M&A, either geographically or rounding out that service offerings, such as adding more decommissioning and capabilities.
Yeah.
Yeah look it's a good question, we are sort of at a little bit of a crossroads because.
We could sell part of the company for all of the company I suppose if we wanted to.
They are.
And we.
Okay.
Could hang onto it and continue milking these incredible cash flows.
It will all come down to what what's the value we can get.
Versus what.
And we can.
Create by keeping it and it will all come down to that but.
And at some point in time, we certainly will test the market a little bit and see if we can get a read on it.
Market value for the business, but.
What's clear to US this is a very valuable company I mean, having now observed.
And how stable the cash flows had been coming through this pandemic.
Really is a remarkable business and the cash flow conversion is and it's rather incredible.
If you think of what.
We're getting compared to what we paid.
Based on.
I think our initial equity check was $920 million for 100% of the business.
It's generating a 30% free cash dividend.
I mean, it's truly remarkable but and.
And Theres still room to grow.
Bolt on opportunities Dennis and his team will continue working their magic and <unk>.
We've got a phenomenal management team there that's doing wonderful wonder.
Wonderful things with the business so.
So yes, it's possible we will consider some form of monetization, but we.
We would only do it at an extraordinary value.
Okay. Okay. Thanks for that and maybe just one last one.
On on brand Safeway.
This is a business that's been a bit challenged and 2020 Jesper you touched on some of this but just trying to get a sense for how this business is performing relative to the underwriting assumptions and have you started to see signs of the demand pick up as well.
And a little bit deeper into 2021.
Sure Devin.
It's slightly below underwriting and it's easy to understand it is directly related to COVID-19 given.
The impact on our customers' businesses, where there's a lot of deferral of activity, but it's deferral not.
Voidance because these are fundamental major maintenance outages that we provide mission critical support to so it will need to get done it will come back we have no concerns in that regard.
And your second related question.
It was just.
Starting to see.
Demand turn as we think about 2021, yeah actually yes. So the order book is starting to show positive signs and.
Again, I think whenever you see the second wave of <unk>.
Covid cases, and any of the markets. We're in it naturally there's a time lag, but and naturally induces customers to pull back and defer again, so I have no doubt it will be a little bit choppy over the next nine months, maybe maybe 12 months, but but like I said the work has got to get done so it's really.
About pushing demand down stream as opposed to us not being able to drive that overall revenue eventually.
Okay. Okay. Thanks for that I'll turn it over and congrats on the good quarter.
Thank you. Our next question comes from the line of Geoff Kwan from RBC capital markets. Your question. Please.
Hi, good morning.
My first question was.
The investments that you made and the public securities that you purchased last year, you've sold some of that and book some of the gains obviously the markets have done very well off the lows I'm just wondering if the securities that were sold like would they have been in companies, where you feel that there is unlikely to be some sort of call it major investment or acquisition.
And at some point and the future.
Look they are and companies that we really like but the valuations got to the point.
And where.
We can earn a higher return redeploying that capital into something else.
Jeff it's that simple and.
It may be that we ended up buying one or two of those companies one day, but it's going to have to be and evaluation that makes sense for us.
Okay.
When I was looking at Genworth and <unk> results yesterday.
It was noted that you've entered into and number of new relationships.
And the past little bit and these would be companies that are within the Bam.
And on a broader empire and like Oaktree, the public security, you're seeing and why locate and whatnot. So.
And essentially driving synergy opportunities across the Brookfield broader Brookfield portfolio.
And from from your perspective, how we describe.
On the incremental growth potential growth opportunity of these call it cross synergies within Bbs portfolio, whether or not there within BBB <unk> owned companies doing business with each other or ones that would be involved.
Within the broader again Brookfield entity.
Yes.
Jeff.
What we're doing here is really adopting our business plan, which when we made our initial investment and decision which was part of it was to improve the yield that we earn on their multibillion dollar investment portfolio.
And.
Historically, the yield has been something around 3%.
If we can move that up by 50 basis points, maybe even a percent overtime and as a material impact to the company's earnings.
And that.
We are simply just executing our.
Business plan and we're fortunate to have I'll say within the band and family.
Oaktree.
One of the greatest money managers on the planet and.
We're happy to allocate some capital to them to manage.
Okay.
And just my last question is you've talked in the past about some investments says I don't know if its platform companies, but essentially companies that you put on over the long term and multiplex would be and example of that looking at the portfolio today would there be other companies that you would kind of fit into that category.
Well look I'll go back to my answer the answer is yes, and I'll go back to my answer on Westinghouse I mean, that's an amazing company generates a lot of cash and.
It may be that that.
If we don't get the price that we wanted to on that business. One day, when we choose to sell it that could be one we could keep for a long long time and.
And there are others too, but that's just an example of all come down to the.
Opportunity cost and the opportunities in front of us.
Okay. Thank you.
Thank you. Our next question comes from the line of Andrew Kuske from Credit Suisse. Your question. Please.
Thanks, Good morning, I guess, it's more of a philosophical question, but work winds up being.
Good Illustrative example, and it's really just on the upstream cash from business as like Western House.
And how do you think about that clearly and enhances your return on the front end.
But do you also see this is instilling greater discipline on the management teams just from your portfolio companies, but you are still on the background to be supportive for further acquisition activity if they need capital.
And just give us some color on that context.
Sure.
Absolutely the case and it's interesting because in our on boarding process.
<unk> closing one of the first things we do is in effect try to reset the tone at the top and part of that is about having putting great management teams in place and making them understand that with Brookfield as an owner there is so much.
Support and Optionality that comes with that.
A big part of why these companies and management teams once they start to figure it out.
Most of them.
Ari openly express how comfortable they are with Brookfield ownership, because you've got that kind of commitment and it's a very returns oriented understand risk before you make investments kind of tone and.
And still and we actually drive cultural change, where these folks start to think like owners just like we do.
A core cultural attribute of any of the Brookfield companies, so by and partying that on our management teams. We ended up having partners and these business businesses that understand we've got significant access to capital. We've we can bring lots of great support and resources and.
It ends up being a great partnership.
That's very helpful and maybe just continuing on Westinghouse Dassault, We've got you on the call.
Can you just give us maybe a bit of color on.
The levels of activity of the business are they similar and how are you seeing effectively margin and margin enhancements and improvements in the business and as a mix price and cost reduction and new business initiatives and if you could give us a bit of a breakdown that would be great.
Sure sure and again as per my previous comments. It really starts with the fact that we've stood up a real board. There are working board, we've got a great CEO and Patrick fragment and CFO and Dan Sumner, they've put exceptional people and place.
And we focus not just on cost reduction, but it's really situational where there are opportunities to drive growth work, we're starting to really get some traction for example, and EMEA again changing the leadership team that we found there. We've now got a great group of people very focused on taking more share.
They're across EMEA and the net effect has been over the last year as some of the implications of Covid have induced a bit of deferral of work and the U S. Well, it's been offset by growth in EMEA.
Similar story in Asia Pacific, where we're growing our our activities in China and in the new projects business, where.
And without taking any of the EPC risks that got this company and trouble, we're really levering. This deep technical capability, we have and a really unique ability to manage the variable nature of engineering services. So that we can step up and provide our customers with.
Technology, leading engineering capability at a moment's notice and then we can scale that back down and when the work's done and or if the order book.
Ends up getting getting reduced and so it's a very dynamic kind of.
Situation and lots of both cost reduction.
Growth and on the technology side as we've commented just briefly as the world really starts to focus on ESG issues and people understand that nuclear is just a phenomenal source of base load power you can turnaround and genuinely drive zero carbon emission power sources both in.
Large scale and or down to and including and micro scale based on the kind of technology, we're investing and so just.
The Companys just positioned and a very unique way given the way the winds are are blowing here macro.
That's very helpful and maybe one final question just renewals for Cyrus and if you could just give us any thoughts you may have on the saturation of the stock market and thoughts on using that as a potential exit vehicle for some of your investments and the future.
Yes, as you are well aware there is there seems to be a new spec launched every day and there's a lot of capital available. So certainly we would.
Selling something.
Absolutely we will consider.
Faxes potential buyers of our companies or.
It means to IPO or companies and thats the appropriate path for them.
Okay. Thank you.
Thank you. Our next question comes from the line of Gary <unk> from day start day. Your question. Please.
Thanks, and good morning, maybe just going back to the Westinghouse discussion it sounds like you're very comfortable with the $800 million.
EBITDA outlook, maybe can you talk about what initiatives or tuck ins can be done to move this target about $800 million what would blue.
Blue Sky scenario before for that asset.
Well look just why don't I start on Dennis can chime in but there are number of many many many small tuck in opportunities we've already done.
Four and.
There are many like that.
Globally and in addition to that there are a handful of larger opportunities that could add.
100, maybe $200 million of EBITDA.
When you factor and synergies and there is there are several of those around the world as well so.
There are many growth opportunities.
And I don't think it would be appropriate for me to mention any of them on this call.
Okay.
And the answer fully answered your question or not yes, there's not a lot I would add to that other than to highlight that the internal target.
Getting beyond 750 run rate EBITDA, that's not including acquisitions.
So we see another 100 130 and Thats in a line of sight, a combination of cost reduction margin improvement and organic growth.
And the momentum I can't stress enough the positive momentum that Patrick and Dan have maintained and frankly increased since taking over the day to day business. So we're very optimistic and the growth characteristics ahead for Westinghouse.
Okay. That's helpful. And then maybe just touching on clearly give us a little bit.
Pretty solid quarter and.
You provided the $300 million cost guidance how.
How do you think about the.
Advanced battery and higher margin potential I think thats outside of the 300 million.
And material or should we start to bake some of that those benefit and any guideposts, there would be would be helpful.
Yes, hi, its stress free.
And I'll start and then Dennis can.
The complement of third and thing Morgan on.
I'd say im curios, the original 300 side.
We had indicated our target EBITDA improvement that way.
And based on.
Operational improvements specifically within the U S operations.
These were tangible things that we had identified within the U S network.
And that we could execute on.
And to improve the underlying EBITDA and the business and.
We're well on our way.
And to doing non.
And John.
John had talked about this at Investor day.
Executed on about $100 million start already we're not seeing it flow through.
On the bottom line, yet, but on an annualized basis.
We've achieved about $100 million of that 300.
The mix change that you're seeing.
Actually we're seeing a lot of that and the aftermarket channel where what's happening is that the first replacement cycle for.
On vehicles, specifically and the U S is now coming on on the advanced batteries and.
We're providing kind of those replacement battery to that first.
Tank cars that needs replacement and Thats really driving on.
Outside demand and the aftermarket for the advanced battery.
And advanced batteries and death.
Definitely a positive impact on margin for the business.
And so.
And that should.
And B.
Tailwind as we look forward by day.
And wouldn't be something that we would have.
And targeted and that 300 and initial operational improvement opportunity.
And Dennis anything Dot well just by exception as Jeff mentioned, we haven't seen it and the numbers yet from a public perspective, but we absolutely see it and the metrics that give us insight to the business.
This was a big carve out and the first.
Phase of the really if you think of it that way with John and Sean are people and they're focused on that carve out and starting to turn the ship so to speak and I think John did a great job setting the table for Mark Wallace and now Mark is in there and it's become apparent to me very quickly. He is very talented CEO talented.
The executive he has made.
And some very significant moves to the organization structure changed.
Change out about a half a dozen leaders and we're really starting to pick up momentum from.
Our value creation plan execution point of view. So we're optimistic on all fronts again, both topline and margin expansion here moving forward.
Okay, perfect that's helpful and and maybe just my last question.
It looks like Theres, some more units repurchase in the quarter.
What's your outlook at the current share price.
So youre right were continuing to buyback units and.
Our view is still that our units are trading at a significant discount to NAV and where we've been active and we'll continue to actively buyback at these levels.
And then we are.
Frictions in terms of how much we can buy back.
And based on that.
The total liquidity.
So, but we are we're very active and we continue to believe that the units are trading at a significant discount to intrinsic value.
And so youll continue to see volume.
Okay, Great and this is my question thanks very much.
Thank you. Our next question comes from the line of Jamie <unk> from National Bank Financial and your question. Please.
Yes, thanks, and good morning.
Related to multiplex I believe you mentioned that the current backlog is 9 billion can you confirm that number and then also frame that relative to previous quarters or even the previous year's at this time.
Yeah.
Hi, Jack.
Did the benign $100 million with the new work that day.
And on the backlog is sitting at five 6 billion.
And weighted.
Between.
And $6 billion is kind of where we'd want to backlog to be for this business.
If you look back historically I think the highest off the top of my head.
It's Ben.
$7 billion.
We're quite comfortable.
<unk> talked about this before.
<unk>.
And.
We have been scaling back the business and the middle East really focused on U K, and Australia, and and having that five $5 billion to $6 billion backlog.
Is the right number for the business and we've got the right team and pleased to kind of manage that in the key geographies and so.
And that's kind of where we're sitting.
Okay, great. Thank you.
With respect to the public securities.
Maybe just a quick refresh for for my benefit the investment and the public Securities and this is primarily to get closer to.
Certain companies that you like and May eventually.
To invest in or is it primarily just to sort of trade the market given the deep discounts at the time and and what are the plans for realization on that on that portfolio.
And so at the time.
We had identified some companies that we had followed for a long time and that could be great privatization candidates and that.
And what we invested in.
When the market was.
Quite choppy and volatile and and.
And.
Exhibited great value and back in March and April.
So that was that was the purpose and.
Our thought at the time was.
And this will position us to buy a couple of great companies.
And if markets recover to the point where.
And it's less attractive to buy and more attractive to sell and that's what we do so and so that is exactly what we're doing so.
Over time, we'll probably sell.
And the vast majority of the position we have we're not on any rush too, but that's the current thinking.
Okay, great and.
Last one just around the corporate borrowing sitting at about $600 million today.
What's the view for using those credit facilities and and upcoming transactions as Vince monetization can you just.
It gave us a near term outlook for free.
Core corporate leverage.
Sure.
I'll take that one.
So you're right, we've got about 600 million and borrowings.
We have got a portfolio of cash and liquid securities for 550.
And as Rick mentioned, we continue to monetize that that will continue into January.
Returns for us.
And we also in January.
Sold down some of our craft acquisitions, which generated circa $220 million of proceeds.
And there is definitely cash coming in the door that we can use to pay down any flooring or some of the learnings that we've got.
And on the facility.
But as we look forward.
The primary purpose that we have these facilities in place.
And we've had them in place since we've launched <unk> and they've grown as the size and scale of the business with growth.
And if you think about our business today, we've got large scale operations and number of them.
And then provide kind of stable ongoing distributions and we feel quite comfortable using our.
Facility to fund acquisitions.
And as and when we have monetization and fees really large businesses thats going to generate a lot of cash for Btu and we'll use those proceeds to pay down the line.
And so youll see us actively using the lines to bridge any gaps between our monetization and kind of growth activities.
Okay. Thank you.
Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to management for any further remarks.
Thank you very much for joining us and we will look forward to speaking to you next quarter.
Thank you, ladies and gentlemen for your participation on today's conference. This does conclude the program you may now disconnect good day.
And so.
And.
And then.
Good day.
And.