Financial results for 2019Hydro-Québec’s net income exceeds $2.9 billion

Éric Martel, President and Chief Executive Officer of Hydro-Québec, and Jean-Hugues Lafleur, Executive Vice President and Chief Financial and Risk Officer, today announce the company’s financial results for 2019. Net income totaled $2,923 million, compared to $3,192 million in 2018. Excluding the non-recurring gain of $277 million recognized in 2018 on the sale of an equity interest in subsidiary TM4 and a $46-million depreciation expense resulting from the write-off of certain costs related to the Northern Pass Transmission (NPT) project in 2019, net income is up $54 million over the previous year.

“We’ve had an excellent year with net income of close to $3 billion, which exceeds our objective,” commented Mr. Martel. “We set a new sales record in Québec and saw baseload demand growth in all customer segments, thanks in part to our initiatives to develop new markets here at home. Moreover, 2020 got off to a great start with the signing of a new export contract with New Brunswick and the creation of a world-class strategic alliance with Innergex in the renewable energy sector.”

2019 highlights

Record sales on the Québec market (174.6 TWh):

Higher baseload demand in all customer segments
Colder temperatures in winter 2019 than the previous winter

Economic spinoffs of Hydro-Québec’s operations:

Contribution to the Québec government’s revenue: $4.2 billion

Exceeded the $4-billion mark for the seventh year running

Major investments throughout Québec: $3.6 billion

Strong volume of net electricity exports:

30-TWh mark surpassed for a fourth consecutive year
Contribution of $631 million to net income

$24-million decrease in operational expenditure compared to 2018:

Careful management of operational expenditure, allowing the company to fully absorb the impacts of inflation, salary indexing and growth in its operations
Lowest headcount since 1976

Completion of the 735-kV Chamouchouane–Bout-de-l’Île project:

Inauguration in July 2019 of all project components, built at a cost of $1.3 billion
Largest 735-kV transmission construction project undertaken in Québec’s
north-south axis in 25 years

Financing activities:

Five bond issues maturing in 2055, at an average cost of 2.58%
Total proceeds: $3.3 billion

Consolidated results

Hydro-Québec posted net income of $2,923 million in 2019, compared to $3,192 million in 2018. Excluding the non-recurring gain of $277 million recognized in 2018 on the sale of an equity interest in subsidiary TM4 and the $46-million depreciation expense resulting from the write-off of certain costs related to the NPT project in 2019, net income increased by $54 million over the previous year. On the Québec market, electricity supplies provided by Hydro-Québec Production to Hydro-Québec Distribution rose by $106 million, in particular because of higher baseload demand and temperature variances. On markets outside Québec, net export volume reached 33.7 TWh, one of the strongest performances in this area in Hydro-Québec’s history. However, net exports decreased by $134 million compared to 2018 under the combined effect of reduced demand on export markets resulting from temperature variances in the second quarter, and lower market prices, whose impact was mitigated by the company’s sales and risk management strategies. Finally, operational expenditure decreased by $24 million thanks to careful management, which enabled the company to absorb the impacts of inflation, salary indexing and growth in its operations.

Investments

Hydro-Québec’s investment program totaled $3.6 billion in 2019. Most of this amount was allocated to large-scale development projects in the generation and transmission segments, as well as to projects to maintain and improve the quality of the company’s assets.

One of the main projects under way involves the construction and connection of the Romaine hydroelectric complex (1,550 MW) in the Côte-Nord region. Three of the four reservoir generating stations in this complex, with 1,305 MW of total installed capacity, are already in operation. On the last jobsite, Romaine-4 (245 MW), construction advanced in 2019 on the dam, powerhouse and switchyard, with a view to impoundment of the reservoir in 2020 and commissioning of the generating station in 2021.

“The high profitability of our operations in 2019 will allow us to pay a dividend of $2.2 billion to our shareholder, the Québec government,” concluded Jean-Hugues Lafleur. “This substantial contribution to the Québec economy, combined with the economic spinoffs of our activities throughout the province, will benefit all Quebecers.”

For more information on Hydro-Québec’s 2019 financial results, visit www.hydroquebec.com/ar.

Information:

Maxence Huard-Lefebvre
Hydro-Québec
Tel.: 514 289-5005
Newsroom: news.hydroquebec.com/en/