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These $3,035-million in earnings result from the strict control of operating expenses and the effective management of market risks in a year marked by a difficult business environment.
“Hydro-Québec posted a very solid performance in 2009 and we’re proud of our results,” said Thierry Vandal, President and Chief Executive Officer of Hydro-Québec. “We owe our success to the dedication and commitment of all Hydro-Québec employees, those energetic women and men who work in all regions of Québec to provide clean, renewable and reliable energy and to develop our resources and infrastructure.”
Dividends of $2,168 million have been paid to the Québec government for 2009.
Hydro-Québec did not record any income from discontinued operations in 2009, after recording $129 million in this regard in 2008 due to a non-recurring gain related to the price adjustments provided for in the contract for the sale of the interest in Transelec, in Chile, concluded in 2006.
Consolidated results
Revenue from electricity sales totaled $12,055 million, compared to $12,364 million for 2008.
In Québec, revenue from electricity sales amounted to $10,549 million, up $104 million from 2008. This increase stems from rate adjustments whose impact was partly offset by a decrease in industrial demand. Revenue from special contracts with large industrial customers was down due to a decrease in aluminum prices, but this was more than offset by the positive impact of hedging on aluminum prices and exchange rates.
In markets outside Québec, revenue from electricity sales totaled $1,506 million compared to $1,919 million for 2008, mainly because of a drop in energy prices in 2009. It should be remembered that Hydro-Québec Production had benefited from exceptional market conditions in 2008 resulting from particularly high energy prices. Net exports by Hydro-Québec Production remained highly profitable in 2009, accounting for 10% of sales volume and 22% of the company’s net income.
Segmented results
Hydro-Québec Production posted net income of $2,214 million for 2009, which is stable compared to the $2,230 million recorded in 2008. The $226-million decrease in revenue from net electricity exports, due to a drop in energy prices, includes a positive impact of approximately $200 million from hedging operations. Revenue from electricity sales to Hydro-Québec Distribution decreased by $207 million as a result of lower demand from industrial customers in Québec.
The negative impact of special contracts with large industrial customers in Québec amounted to $254 million in 2009, $180 million more than in 2008, due to a drop in aluminum prices. However, this was more than offset by the positive effect of the company’s hedging on aluminum prices and exchange rates, which totaled some $400 million, $273 million more than in 2008. Depreciation and amortization expense decreased by $267 million.
Hydro-Québec TransÉnergie recorded net income of $435 million, up $9 million over 2008.
Hydro-Québec Distribution posted net income of $365 million compared to $388 million in 2008. This is mainly due to the recording in 2008 of a $129-million regulatory asset arising chiefly from warmer weather in previous years. The effect of this non-recurring item was partly offset by higher revenue from electricity sales and by a decrease in electricity purchases and transmission costs.
Hydro-Québec Équipement and Société d'énergie de la Baie James (SEBJ) recorded a volume of activity of $2,678 million, compared to $2,416 million in 2008. The Eastmain‑1‑A/Sarcelle/Rupert project reached a milestone with the startup of the Rupert diversion, ahead of schedule and within budget. In addition, Hydro-Québec inaugurated its 1,250-MW interconnection with Ontario in September 2009. Construction work also began on the Romaine complex.
Investments
In 2009, Hydro-Québec (hydroquebec.com) made $4.3 billion in capital investments, compared to $4.0 billion in 2008. Most of this amount went to development and growth projects for Hydro-Québec Production, Hydro-Québec TransÉnergie and Hydro‑Québec Distribution, as well as to the Energy Efficiency Plan. Hydro-Québec Production invested $0.6 billion to acquire an interest in Manicouagan Power Limited Partnership, which owns and operates McCormick generating station located on the Rivière Manicouagan.
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