Montreal, August 27, 2021
Hydro-Québec’s net income up $388 million or 24% in first half of 2021
Record volume of net electricity sales
Hydro-Québec posted net income of $1,993 million for the first six months of 2021, up $388 million compared to the $1,605 million recorded for the same period in 2020. This increase is mainly due to an $89-million rise in net electricity sales in Québec, a jump of $133 million in net electricity exports and a $124-million decline in financial expenses. Net sales across all markets reached a historic volume of 109.9 TWh in the first half of 2021, given that the company was able to seize business opportunities on export markets while also meeting the additional needs of its Québec customer base.
“The marked increase in our results for the first six months reflects the resumption of economic activities in Québec,” commented Jean-Hugues Lafleur, Executive Vice President and Chief Financial Officer of Hydro-Québec. “As you’ll recall, the second quarter of 2020 coincided with the start of the COVID-19 pandemic and the implementation of strict public health measures throughout the province, which had a major impact on our financial performance. This year, based on the strength of our first-semester results, we’re optimistic about the months ahead.”
Highlights of the first six months
- Increase in electricity demand from all customer segments
- Warmer temperatures in spring 2021
- More than 3°C higher in April
Markets outside Québec:
- High volume of net exports: 18.5 TWh
- Volume growth of more than 25%
- Average price obtained: 4.2¢/kWh
- Investments in property, plant and equipment and intangible assets up nearly $500 million
- Significant increase in investments allocated to asset sustainment and improvement
- Commissioning and inauguration of two photovoltaic solar power plants in the Montérégie region
- Gabrielle-Bodis generating station, in La Prairie
- Robert-A.-Boyd generating station, in Varennes
- Two tranches of fixed-rate bonds maturing in 2060 issued in the second quarter at an average cost of 2.87%, raising proceeds of $0.8 billion
- Total amount raised since the beginning of the year: $1.7 billion
On the Québec market, net electricity sales increased by $89 million, mainly because of a $93-million rise in electricity sales due in particular to growth of 1.4 TWh in baseload demand under the combined effect of the resumption of economic activities and the continuation of telework for many employees, which drove up demand from both business and residential customers. This factor was partly offset, however, by the fact that temperature variances led to a 1.0-TWh decrease in electricity sales, mainly as a result of the warm spring weather in 2021.
On markets outside Québec, net electricity exports jumped by $133 million, essentially on account of a 3.8-TWh volume increase due in part to greater needs on external markets, where demand had dropped at the beginning of the pandemic last year. The company also took advantage of favorable market conditions arising in particular from the warmer temperatures in the second quarter to seize business opportunities. It thus maintained its net export volume at a high level, i.e., 18.5 TWh, slightly below the record of 18.7 TWh set in the first six months of 2018.
Financial expenses decreased by $124 million, primarily because of the maturity of certain high interest debts and the issuance of new debt at much lower rates, given the favorable conditions on the capital market.
Finally, Hydro-Québec invested $1,861 million in property, plant and equipment and intangible assets in the first half of 2021, compared to $1,388 million a year earlier. This variance is due to the fact that the company’s jobsites had been strongly affected by the declaration of the public health crisis in March 2020. Work progressed on the Romaine-4 development, as did the projects aimed at ensuring the reliability and long-term operability of generation, transmission and distribution assets.
For more information on Hydro-Québec’s results for the first six months of 2021, visit www.hydroquebec.com/about/financial-results/quarterly-bulletin.html.
Caroline Des Rosiers