Hydro-Québec posts net income of $1.5 billion for the first quarter of 2020

For the three-month period ended March 31, Hydro-Québec recorded net income of $1,525 million in 2020, compared to $1,774 million in 2019. It is worth recalling that last year, the company posted one of the best first-quarter performances in its history.

“Temperatures were milder in winter 2020 than in the previous winter, which led to a decrease both in our electricity sales on the Québec market and in our net exports,” explained Jean-Hugues Lafleur, Executive Vice President and Chief Financial and Risk Officer of Hydro-Québec. “Looking ahead, the repercussions of the global COVID-19 pandemic will likely be felt in the coming quarters. Due to the economic downturn resulting from the current crisis, we’re anticipating lower electricity sales on all of our markets. Consequently, the financial outlook for 2020 set out in the Strategic Plan 2020–2024 will be revised downward.

Quarter highlights

Québec market

Milder temperatures in winter 2020 (3?C higher than in winter 2019)
Decrease of $81 in the electricity bill of a midsize single-family home for the January–March period
Increase of 1.8 TWh in baseload demand (excluding temperature variances), particularly from large industrial customers

Markets outside Québec

Net electricity exports: 8.7 TWh
Average export price obtained: 4.9¢/kWh, compared to 5.1¢/kWh in the first quarter last year
Negative impact of lower market prices mitigated by the positive impact of the company’s sales and risk management strategies

Financing activities

Two fixed-rate bond issues maturing in 2055, at a cost of 2.27%
Proceeds: $1.4 billion

On the Québec market, net electricity sales decreased by $107 million compared to the first quarter of 2019, under the combined effect of two main factors. First, electricity sales decreased by $243 million, primarily as a result of the mild temperatures in winter 2020 whose impact was mitigated by higher baseload demand, particularly from large industrial customers. Second, external electricity and fuel purchases by Hydro-Québec Distribution fell by $95 million because of lower output from wind farms under contract.

On markets outside Québec, Hydro-Québec Production’s net electricity exports decreased by $91 million. Export volume totaled 8.7 TWh, or 1.3 TWh below the 10.0 TWh recorded in the first quarter of 2019, essentially because of lower demand and lower prices on export markets as a result of temperature variances. However, the lower market prices were partially offset by the positive impact of the company’s sales and risk management strategies.

Finally, Hydro-Québec invested $738 million in property, plant and equipment and intangible assets in the first quarter of 2020. Work continued on the Romaine-4 jobsite, in the Minganie region. The company also carried on with its investments to ensure the reliability and long-term operability of its generation, transmission and distribution assets.

Financial results

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For more information:
Maxence Huard-Lefebvre
Hydro-Québec
Tel.: 514 289-5005