Canadian utility Hydro-Québec posted net income of $1,993 million for the first half of 2021, an increase of $388 million compared to the $1,605 million recorded for the same period of 2020.
This increase is mainly due to an increase of $89 million in net electricity sales in Quebec, a $133 million jump in net electricity exports and a $124 million decrease in financial expenses.
The volume of net sales in all markets reached an all-time high of 109.9 TWh for the first six months of 2021, which the company attributes to having been able to seize business opportunities in its export markets while meeting the increased needs of Quebec customers.
“The marked improvement in our results for the first half of the year comes against the backdrop of the resumption of economic activities in Quebec,” commented Jean-Hugues Lafleur, executive vice president and chief financial officer of Hydro-Québec. “It should be remembered that the second quarter of last year coincided with the start of the COVID-19 pandemic and the implementation of strict health measures throughout Quebec, which had a significant impact on our performance. This year, the very good results of the first half of the year allow us to look forward to the coming months with optimism. “
In the Quebec market, net electricity sales increased by $89 million, mainly due to an increase of $93 million in electricity sales attributable in particular to a 1.4 TWh increase in base demand. The resumption of economic activities and the pursuit of teleworking for a good number of employees have led to an increase in demand from business customers and the residential sector. This was partially offset, however, by the fact that temperatures caused a 1.0 TWh decrease in electricity sales, mainly due to the mild spring of 2021.
In markets outside Quebec, net electricity exports jumped by $133 million, mainly due to a volume increase of 3.8 TWh, which is explained, among other things, by increased needs on external markets, where demand fell at the start of the pandemic last year. In addition, the company took advantage of favorable market conditions resulting in particular from warmer temperatures in the second quarter to seize business opportunities. It thus maintained its volume of net exports at 18.5 TWh, slightly below the record of 18.7 TWh set in the first half of 2018.
Financial expenses decreased by $124 million. This decline was largely the result of certain debts that bore high interest rates maturing and the issuance of new debts at much lower interest rates, given the favorable context in the capital market.
Finally, Hydro-Québec devoted $1,861 million to its investments in property, plant and equipment and intangible assets during the first six months of 2021, against $1,388 million a year earlier, when the declaration of the state of crisis health in March 2020 had a major impact on the company’s sites. Work on the Romaine-4 site continued to progress, as did projects aimed at making production, transmission and distribution assets more reliable and sustainable.