Hydro-Quebec had a net profit of $2.7 billion in the first half of this year

Hydro-Quebec had a net profit of $2.7 billion in the first half of this year

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

During a press conference, Executive Vice President and Chief Financial Officer of Hydro-Québec, Jean-Hugues Lafleur, noted that "quarterly net profit declined due, in particular, to lower sales volumes outside Quebec."

The Crown Foundation indicated, during the presentation of its financial results today, Friday, that “the implementation of the risk management strategy allowed the company to benefit from the rise in futures prices prevailing in 2022, which led to a significant increase in revenues from foreign sales to Quebec in 2023.”

However, Hydro-Quebec noted that this increase was offset by three main factors: “decreased electricity sales in Quebec due to a mild winter, increased operating expenses and higher ‘consumption’ load.”

Declining exports

In a press release, Hydro-Québec noted that the second quarter of the year was marked by "unfavorable weather conditions" in its export markets, and that even if the "risk management strategy continues to mitigate the effects of lower prices," the company's quarterly net profit declined, This is particularly due to the low volume of sales outside the province.

Hydro-Québec expects the price decline observed since the beginning of 2023 to continue to impact results.

The average price that Crown earned on exports (including the effect of hedging) is 10.9 cents/kWh (kWh) compared to the going rate of 5.2 cents/kWh over the period.

The export sales volume was 14.9 TWh, down by 2.2 TWh from the first half of 2022.

Electricity sales in markets outside Quebec amounted to $1.626 billion, up $390 million from the $1.236 billion recorded in the same period last year.

Consumption declines in Quebec

In Quebec, electricity sales brought in $7.086 billion, $114 million less than the $7.2 billion recorded in 2022, "mainly due to temperatures that led to a $335 million decline."

Hydro-Québec noted that winter temperatures were milder in 2023, 9 degrees Celsius higher than they were in January 2022, which explains lower consumption.

Hydro-Québec reported an increase in operating expenses of $121 million in 2023, which will 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.”

Crown also spent $2.028m on capital investments during the first half of this year, a similar amount to the $2.005m it invested in the previous year.