* Q1 EPS $0.15 vs $0.31
* Says it’s well-positioned to buy distressed properties
* Sees strong earnings base through 2010 (Adds comment from conference call, analysts; in U.S. dollars unless noted)
TORONTO, May 5 (Reuters) - Brookfield Asset Management Inc (BAMa.TO) said on Tuesday quarterly profit fell 53 percent in but operating cash flow dropped less dramatically as steady rents and power contracts mitigated the impact of recession.
Toronto-based Brookfield — a major stakeholder in Brookfield Properties BPO.TO, one of Manhattan’s biggest office landlords — said profit in the first quarter was lower because of the weak economy this year.
But the company also said it was ready to take advantage of the global downturn by snapping up distressed properties if it saw the chance.
“We will continue to make our liquidity and debt maturity a top priority to ensure we are in good shape to act on any investment opportunities that arise,” Chief Financial Officer Brian Lawson told analysts after the earnings were released.
While executives said there was no telling whether such an opportunity would arise within three months or two years, analysts said Brookfield could be counted on to be a bidder if and when good targets appeared.
“In the past Brookfield has bought many of their largest assets at distressed times — for example, the World Financial Center office properties in New York City. So clearly this is an opportunity for them to get the type of trophy assets they like to acquire and own,” said Mark Rothschild, an analyst at Genuity Capital Markets in Toronto.
Brookfield, which also has renewable power and infrastructure interests, earned $93 million, or 15 cents a share, in the three months ended March 31. That compares with $197 million, or 31 cents, in the same period a year ago.
Analysts had expected earnings of 16 cents a share, according to Reuters Estimates.
“It’s not a gangbuster quarterly ... but I’m actually encouraged by how well the commercial real estate has held up. They’re able to lease, able to finance, and their vacancy rates are still very very low,” said Ian Nakamoto, an analyst at MacDougall, MacDougall & MacTier.
“Their two core businesses, the commercial real estate and power side, are very steady-Eddie sorts of businesses,” he added.
While foreign exchange losses and higher gains from asset sales in 2008 made the 2009 results look especially weak, Brookfield was also hurt by falling gas prices, which cut into its power business, and by declines in commercial real estate, though vacancies remain low.
Brookfield said it has contracted more than 75 percent of its expected renewable power generation for the balance of 2009 and 2010.
Brookfield, which has about $80 billion in assets under management, said cash flow from operations was $273 million, or 46 cents a share. Last year’s comparable results were $443 million, or 72 cents, which included a number of special items that gave rise to gains.
Brookfield’s shares were little changed at C$18.09 in Toronto on Tuesday afternoon.
$1=$1.18 Canadian Reporting by Andrea Hopkins, editing by Frank McGurty