The robust economic recovery in 2021 allowed Hydro-Québec not only to make up for the ground lost in 2020, but even to exceed its pre-pandemic results.
Financial results released Thursday by the state-owned company show record net profit of $3.546 billion, up 55% from $2.303 billion in 2020. 2020 results had been weighed down by the pandemic, but the 2021 recovery has been so robust that it has propelled Hydro to unprecedented heights.
This performance enabled the state corporation to pay the government the highest dividend in its history, namely $2.673 billion.
“We managed to make an arrow of all wood: the economy was there, the demand in Quebec was there, the demand on the American markets was there, the hydraulicity was good”, summed up the president and general manager of Hydro. , Sophie Brochu, in a virtual conference.
The Executive Vice-President, Jean-Hugues Lafleur, also specified that several long-term loans had come to maturity, which had made it possible to renew them at lower interest rates and that the aluminum sector had allowed collect an additional $115 million due to the sharp rise in the price of a metric ton of aluminum. The electricity bill for aluminum smelters varies according to the price of aluminum and, while the metric ton was selling for $1,500 in 2020, the average price was $2,500 per metric ton in 2021 and it even reached 3,400 $ these days.
After having had to curb its investments because of the health context in 2020, the investment program totaled $4.2 billion in 2021, compared to $3.4 billion a year earlier.
The impact of temperature
Mr. Lafleur specified that only one element had harmed the performance of the Crown corporation: “The temperature came to counterbalance, in fact it is the only element which was negative in the year 2021, mainly because of the mild temperatures in the second trimester. Had it not been for these temperatures, the profit would have been still a hundred million higher. »
On this subject, Sophie Brochu wanted to be reassuring for the current winter, while the cold, this time, is there and adds to the economic situation. “We are in an environment where inflation is starting to weigh on households. At Hydro-Québec, we will show great empathy. […] It’s cold this winter and everyone who wasn’t on equal payments saw the impact of that on their bill and it’s not small. If people have problems, they call Hydro, we come to an agreement. There is no service cut,” she said.
Strong increase in Quebec and for exports
Hydro-Québec benefited not only from the economic recovery in Québec, but also in its export markets. In Quebec, its net electricity sales reached an all-time high of 175.2 TWh, which represents a gain of $444 million, mainly due to the recovery in demand from business customers. This performance would have been even stronger if Quebec had not experienced mild temperatures in the spring of 2021.
On export markets outside Quebec, the volume of sales reached 35.6 TWh, the second best performance in its history, which translates into an increase of $333 million compared to 2020 for a total of 1,658 billion dollars. Exports alone account for 17% of the state-owned company’s net sales volume and boosted net income by $865 million, up more than 60% from 2020.
Favorable economic conditions allowed it to obtain an average price of 4.7 cents per kilowatt / hour in export markets, compared to 4.2 cents the previous year.
Organizational overhaul
In presenting its financial results, Hydro announced at the same time that it was adopting “a new organizational structure that will allow it to maximize collaboration and agility within the company”.
“We are going to operate transversally. It starts Monday (February 28), it will take months and months of installation. It’s a major cultural evolution,” explained Ms. Brochu, specifying that the three traditional divisions of Hydro, ie production, transmission and distribution, will no longer be treated in silos, but rather as a whole.