Hydro-Québec’s Quarterly Net Income above $2 Billion

For the first three months of 2022, Hydro-Québec posted net income of $2,062 million, up $421 million over the $1,641 million recorded for the same period in 2021. This increase is mainly due to higher sales revenue, both in and outside Québec, which was partially offset by an increase in short-term purchases on electricity markets to meet ad hoc requirements resulting from cold winter temperatures.

“We’re starting the year with a noteworthy financial performance in a context marked by cold temperatures and a sharp rise in prices on our export markets,” commented Jean-Hugues Lafleur, Executive Vice President and Chief Financial Officer of Hydro-Québec. “Sales volume across all our markets reached a historic peak for the first three months of the year. We were thus able to go on contributing to the decarbonization of northeastern North America and to Québec’s collective wealth by meeting the increased needs of Québec consumers while exporting significant quantities of electricity to neighboring markets.”

Quarter highlights

  • Québec market:
    • High sales volume: 58.7 TWh
    • Cold temperatures
      • January 2022: 7°C lower than in January 2021
    • Electricity demand up in all customer segments
  • Markets outside Québec:
    • Significant price increase on export markets
      • Average sales price (including hedges): 7.4¢/kWh versus 5.1¢/kWh in the first quarter of 2021
    • High export volume: 8.7 TWh
  • Investments:
    • $856 million invested in property, plant and equipment and intangible assets in all regions of Québec
      • Increase of nearly 20% compared to the same quarter last year
    • More than two thirds of investments allocated to asset sustainment
  • Financing:
    • Two fixed-rate issues with proceeds totaling $1.0 billion
      • Medium-term notes maturing in 2028, at a cost of 2.05%: $0.6 billion
      • Bonds maturing in 2060, at a cost of 3.04%: $0.4 billion

In Québec, sales jumped 5.3 TWh compared to the same period in 2021, bringing in $546 million more than the $3,843 million posted a year ago due to several factors. First, temperatures led to an increase of 3.6 TWh or $311 million. Their impact was mainly felt in January—the coldest on record since 2004—when they averaged −14°C compared to −7°C last year. Second, baseload demand rose by 1.7 TWh or $108 million as a result of higher energy consumption in all segments, especially among residential customers and in the commercial, institutional and small industrial segment. An increase in aluminum prices, which have an impact on revenue from special contracts with certain large industrial customers, also drove up electricity sales in Québec.

On markets outside Québec, revenue from electricity sales reached $646 million, or $115 million more than a year earlier. This increase is mainly due to favorable market conditions during the quarter. Energy markets saw a sharp rise in prices, although this factor was partially offset by the impact of the company’s risk management strategy. Export volume decreased by 1.8 TWh compared to the first quarter of 2021 because of the greater needs of the Québec market resulting from the cold temperatures.

Electricity purchases rose by $269 million over the same period last year, primarily because of an increase in short-term supplies purchased on the markets to meet Québec’s ad hoc requirements during the cold spells. To a lesser extent, the difference also results from a higher volume of wind power supplies on account of the greater output of facilities under contract.

Lastly, Hydro-Québec invested $856 million in property, plant and equipment and intangible assets during the first three months of 2022, compared to $717 million a year ago. Work progressed on the Romaine-4 jobsite in preparation of the commissioning of the generating station in 2022. The company also continued to invest in order to enhance the reliability and long-term operability of its facilities throughout Québec.

For more information on Hydro-Québec’s results for the first quarter of 2022, visit www.hydroquebec.com/about/financial-results/quarterly-bulletin.html

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