Montréal, August 26, 2022
Hydro-Québec posts net income of $2.7 billion for the first semester of 2022
For the first six months of 2022, Hydro-Québec posted net income of $2,742 million, up $749 million from the first semester of 2021. This strong growth is mainly due to a significant rise in sales revenue, both in and outside Québec, which was partially offset by an increase in short-term electricity purchases on the markets to meet ad hoc requirements during the cold winter spells.
“Because electricity demand remained strong in Québec and energy prices continued to soar on our export markets in the second quarter, our net income nearly doubled compared to the corresponding quarter last year,” commented Hydro-Québec’s Executive Vice President and Chief Financial Officer, Jean-Hugues Lafleur. “In the first half of 2022, our total sales volume reached an all-time high due to buoyancy across all our markets. While meeting the increased needs of our Québec customer base, we continued to support the decarbonization of northeastern North America by exporting significant quantities of electricity to neighboring markets, thereby contributing to the collective wealth of Quebecers.”
- Québec market:
- High sales volume: 97.7 TWh
- Cold winter 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 price obtained: 7.2¢/kWh versus 4.6¢/kWh a year earlier
- High export volume: 17.1 TWh
- May storm:
- Rare weather event known as a “derecho” leaves more than half a million customers
- Weather event requiring the most fieldwork since the 1998 ice storm
- Estimated restoration costs: about $70 million, including operational expenditure of $55 million
- No impact on electricity rates
- More than $2 billion invested in property, plant and equipment and intangible assets throughout Québec
- Commissioning of the first unit at Romaine-4 generating station, the last facility in the Romaine hydroelectric complex
- Financing activities raised $1.9 billion in the second quarter, in a context marked by rising interest rates on financial markets
- Issuance of bonds maturing in 2060 and 2063, at an average cost of 4.07%: $1.3 billion
- Issuance of medium-term notes maturing in 2028, at a cost of 2.95%: $0.6 billion
- Total proceeds raised since the start of the year: $2.9 billion
In Québec, sales jumped by 6.3 TWh compared to the same period in 2021, bringing in $747 million more than the $6,453 million posted a year ago on account of several factors. First, temperatures led to an increase of 3.7 TWh or $323 million. Their effect 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 2.6 TWh or $188 million as a result of growth in energy consumption in all segments, especially among residential customers and in the commercial, institutional and small industrial segment. The increase in aluminum prices and the indexation of rates also drove up electricity sales on the Québec market.
On markets outside Québec, revenue from electricity sales reached $1,236 million—$383 million more than a year earlier. This increase is mainly due to favorable market conditions during the semester. 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 1.5 TWh compared to the first six months of 2021 because of the greater needs of the Québec market resulting from the cold winter temperatures.
Electricity purchases increased by $365 million over the same period last year due to four main factors: an increase in short-term supplies purchased on the markets to meet Québec’s ad hoc requirements during the cold spells; higher transmission costs for exports; the coming into force of new power purchase agreements; and a larger volume of wind power supplies because of higher output from contracted facilities.
Lastly, Hydro-Québec invested $2,005 million in property, plant and equipment and intangible assets during the first six months of 2022, compared to $1,861 million a year earlier. At the Romaine-4 hydroelectric facility, the first of the generating station’s two units was commissioned at the end of June, and the second is expected to follow by the end of the year. The company also continued to invest in asset sustainment projects aimed at enhancing the reliability and long-term operability of its facilities.
For more information on Hydro-Québec’s results for the first semester of 2022, visit www.hydroquebec.com/about/financial-results/quarterly-bulletin.html.
Tel.: 514 289-5005