Hydro-Québec made a net profit of $2.7 billion in the first half of 2023

2023-08-25 16:11:53

Hydro-Quebec reported net income of $2.69 billion for the first half of 2023, down $55 million from the record high of $2.74 billion in the same period last year.

During a press conference, the Executive Vice-President and Chief Financial Officer of Hydro-Québec, Jean-Hugues Lafleur, noted that the “quarterly net profit is down due in particular to the decrease in the volume sold outside of Quebec”.

During the presentation of its financial results on Friday, the Crown corporation indicated that “the implementation of the risk management strategy has allowed the company to take advantage of the high futures prices prevailing in 2022, which led to a significant increase in revenue from sales outside Quebec in 2023”.

However, Hydro-Quebec pointed out that this increase was offset by three main factors: “a decrease in electricity sales in Quebec due to a mild winter, an increase in operating expenses and an increase in the load of ‘amortization “.

Decline in export volume

In a press release, Hydro-Québec pointed out that the second quarter of the year was marked by “unfavorable weather conditions” in its export markets and that even if its “risk management strategy continued to mitigate impacts of the fall in prices”, the quarterly net profit is down, due in particular to the drop in the volume sold outside the province.

Hydro-Québec expects the decline in prices observed since the start of 2023 to continue to influence results.

The average price that the state company obtained on export (including the effect of hedging) is 10.9 cents/kilowatt hour (kWh) while the going price was 5.2 cents/kWh during this period.

Export sales volume was 14.9 terawatt-hours (TWh), down 2.2 TWh from the first half of 2022.

Electricity sales on markets outside Quebec represented $1.626 billion, up $390 million from the $1.236 billion reported for the same period last year.

Drop in consumption in Quebec

In Quebec, electricity sales brought in $7.086 billion, or $114 million less than the $7.2 billion recorded in 2022, “mainly due to temperatures which led to a decrease of $335 million”.

Hydro-Québec pointed out that winter temperatures were milder in 2023, 9°C higher than in January 2022, which would explain the drop in consumption.

Hydro-Québec reported operating expenses that increased by $121 million in 2023, which would result, among other things, “from the growth of the company’s activities aimed at improving the quality and reliability of service, in particular through increased maintenance and upkeep and increased spending on digital services.

Also, the Crown corporation devoted $2,028 million to its capital investments during the first half of the current year, an amount similar to the $2,005 million invested a year earlier.