May 9, 2014
Hydro-Québec posted a net result of $2,942 million in 2013. The result from continuing operations rose by $202 million to $2,938 million—the best result ever recorded by the company for its continuing operations. The increase is due to growth in revenue from markets outside Québec and to cost reductions.
"We are proud of this increase in our profitability, which we achieved even as residential rates in Québec continued to be the lowest in North America. Markets outside Québec contributed $622 million to our earnings. I'd like to highlight the excellent work of our employees who once again made solid efficiency gains throughout the year, allowing us to lower our current operating expenses by $42 million," commented Thierry Vandal, President and Chief Executive Officer of Hydro-Québec.
For the 2013 financial year, the company has paid a dividend of $2,207 million to the Québec government.
The increase in the result from continuing operations is due, among other things, to a $254‑million rise in net electricity exports compared to 2012. In addition, electricity purchases from Rio Tinto Alcan decreased by $122 million. It should be remembered that Hydro-Québec had bought large quantities of electricity from that company in 2012. These favorable items were partly offset by the deferred implementation of Hydro-Québec Distribution's rate adjustment, that is, the difference between the April 1 effective date of the rate adjustment and the recording of additional costs as of January 1. In 2013, the amplified effect of the deferred implementation of the rate adjustment had a negative impact of $91 million. Moreover, Hydro-Québec TransÉnergie recorded a $42‑million adjustment related to its 2013 rate case, mainly due to a reduction in the cost of debt, which decreased from 7.03% in 2012 to 6.53% in 2013, benefiting customers.
When the discontinued operations are factored in, the net result totaled $2,942 million in 2013, compared to $860 million the previous year.
Hydro-Québec Production recorded a result from continuing operations of $1,926 million in 2013, a $385‑million increase over 2012. Net electricity exports were up $254 million from the previous year. Electricity sales to Hydro-Québec Distribution increased by $135 million compared to the $4,755 million recorded in 2012, due, among other things, to the colder temperatures in 2013 than in 2012 and to higher demand in Québec. Electricity purchases from Rio Tinto Alcan decreased by $122 million. It should be remembered that Hydro-Québec Production had bought large quantities of electricity from that company in 2012. Depreciation and amortization expense increased by $34 million.
Hydro-Québec TransÉnergie's result from continuing operations was $513 million, compared to $581 million in 2012. This $68‑million decrease is due, among other things, to an adjustment related to the division's 2013 rate case, mainly because the cost of debt decreased from 7.03% in 2012 to 6.53% in 2013, benefiting customers.
Hydro-Québec Distribution posted a result from continuing operations of $410 million in 2013 compared to $503 million in 2012, a decrease of $93 million. Revenue from electricity sales increased by $569 million on account of three main factors: temperatures that were colder in 2013 than in 2012; higher demand; and the rate adjustments of April 1, 2012 and 2013. Net amounts receivable from customers decreased by $138 million, partly because of revenue variances related to climate conditions given the colder temperatures in 2013. Net electricity purchases rose by $453 million, mainly due to a $319‑million increase in supplies purchased from third parties, primarily independent wind power and biomass energy producers, as well as in short-term purchases made on markets to meet occasional needs. Supplies from Hydro-Québec Production, for their part, increased by $135 million. In addition, depreciation and amortization expense increased by $40 million compared to 2012.
In the Construction segment, the volume of activity at Hydro-Québec Équipement et services partagés and Société d'énergie de la Baie James totaled $2,574 million in 2013, compared to $2,295 million in 2012. Projects under way for Hydro-Québec Production include ongoing construction of the Romaine complex. Work in progress for Hydro-Québec TransÉnergie includes expansion of the transmission system in the Minganie region, the addition of a 735/315‑kV section and related work at Bout‑de‑l'Île substation as well as various projects stemming from continued investment in asset sustainment.
Hydro-Québec invested $4.3 billion in 2013, compared to $3.9 billion in 2012. As expected, most of this amount was devoted to the company's development and growth projects as well as to maintenance and improvement activities.
In 2013, Hydro-Québec's financing activities raised $2.2 billion on the Canadian market. The proceeds were used to support part of the investment program and to refinance maturing debt.
For more information on Hydro-Québec's 2013 financial statements, visit www.hydroquebec.com/ar.
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