Montréal, November 18, 2016
The company posts net income of $306 millionHydro-Québec: Record volume of net exports in the third quarter
Lise Croteau, Executive Vice President and Chief Financial Officer of Hydro-Québec, today announces the company’s results for the third quarter of 2016. Net income totaled $306 million.
“We took advantage of several business opportunities on markets outside Québec, which resulted in a record volume of quarterly net electricity exports. This allowed us to offset the decrease in prices on energy markets and to maintain our third-quarter net income above $300 million,” commented Lise Croteau.
The difference compared to the $339-million net income posted in the third quarter of 2015 is mainly due to an increase in financial expenses attributable to exchange rate fluctuations.
• Markets outside Québec: Net electricity exports of 9.8 TWh, a historic quarterly high
-Previous record exceeded by more than 15%
-Good availability of generating and transmission facilities
• Financial expenses: Lower exchange gain than last year because the Canadian dollar did not depreciate as markedly as in the same period of 2015
• Financing: Issuance of variable-rate notes for a total of $1.0 billion, maturing in 2019
On markets outside Québec, Hydro-Québec Production recorded net exports of 9.8 TWh, a historic quarterly high and a 1.4-TWh increase compared to the previous record, set in the third quarter of 2015. Good availability of generating and transmission facilities, combined with high runoff, enabled the division to seize several business opportunities, making it possible to completely offset the impact of lower prices on energy markets.
Financial expenses increased by $26 million, essentially on account of the foreign currency effect on working capital denominated in U.S. dollars. Because the Canadian dollar did not depreciate as markedly as in third quarter 2015, the exchange gain was lower than last year. This is the main factor behind the difference compared to 2015 net income.
For the nine months ended September 30, 2016, Hydro-Québec recorded net income of $2,196 million, compared to $2,472 million in the same period of 2015. On the Québec market, supplies provided by Hydro-Québec Production to Hydro-Québec Distribution decreased by $156 million, mainly as a result of first-quarter temperatures, which were much colder in 2015 than in 2016. On markets outside Québec, net electricity exports decreased by $79 million. They reached a record high of 24.4 TWh after three quarters, which is all the more remarkable given the unavailability of a major power transmission link between Québec and New England in April and May 2016. The volume increase, combined with the positive impact of the company’s risk management strategy, partly offset the decrease in prices on energy markets.
Finally, Hydro-Québec invested $2,308 million in property, plant and equipment and intangible assets in the first three quarters of 2016, compared to $2,347 million in 2015. Major projects under way include ongoing work to build and connect the Romaine hydroelectric complex and work on the 735 kV Chamouchouane–Bout-de-l’Île project.
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