Hydro-Quebec earned income of $3.04 billion in 2009 despite strong recessionary headwinds that included less revenue from industrial sales in Quebec and a higher Canadian dollar.
"This is an historic summit for the enterprise," chief executive officer Thierry Vandal told a Montreal Board of Trade luncheon Thursday. "We are very proud of this result."
Active risk management in the form of financial hedges for exchange rates, aluminum prices and energy prices helped offset a drop in industrial sales in Quebec and revenue from exports, Vandal said.
"We have always done (hedging), and it certainly shows results in a year where you get major market movement," he said in an interview.
Hedging added about $600 million to the utility's bottom line.
Net income was $106 million lower than the $3.14 billion posted in 2008 because results for that year were inflated by gains from a price adjustment related to the 2006 sale of the utility's Chilean assets. Income from continuing operations in 2008 was $3.01 billion.
Revenue from 2009 electricity sales in Quebec increased by $104 million from 2008 to $10.55 billion mainly because of rate hikes. Revenue from large industrial customers dropped in part because of lower aluminum prices. Special industrial rates are linked to aluminum prices.
Revenue from outside Quebec in 2009 totalled $1.51 billion compared to $1.92 billion in 2008, mainly because of a drop in prices charged outside the province. In 2009, outside sales accounted for 10 per cent of Hydro-Quebec's sales but 22 per cent of its revenue. In 2008, about 32 per cent of the utility's revenues were from external sales, which then made up eight per cent of its sales.
Hydro-Quebec paid its sole shareholder, the Quebec government, a dividend of almost $2.17 billion.