Transmission utility's profit slides to $143 million from $216 million after IPO
TORONTO—Hydro One had a 34 per cent decline in fourth-quarter profit, suffering the impact of unusually warm weather and multiple wind storms that occurred about the same time as the utility’s debut on the Toronto Stock Exchange.
The electricity transmission and distribution utility’s profit in the last three months of 2015 was $143 million, down from $216 million in the fourth quarter of 2014 when Hydro One was fully owned by Ontario’s provincial government.
Its net income amounted to 26 cents per share, or 24 cents per share after adjustments in the fourth quarter of 2015, down from 45 cents and 36 cents respectively in the fourth quarter of 2014
Revenue fell by $140 million to $15.2 billion, down 8.4 per cent from the fourth quarter of 2014.
Hydro One says unseasonably warm weather in the fourth quarter contributed to the lower revenue due to less demand at peak times. Its expenses were also affected by multiple wind storms that necessitated repairs and other expenses.
“While the fourth quarter’s results reflect a number of … unusual and unseasonal weather-related items, Hydro One is at its core a strong and growing business,” said Mayo Schmidt, president and CEO of Hydro One.
The company will pay a quarterly dividend of 34 cents per common share—the first since Hydro One completed its initial public offering and its shares began trading on the Toronto Stock Exchange on Nov. 11.
Schmidt, whose previous experience includes transforming the Saskatchewan Wheat Pool into a larger publicly traded company known as Viterra, said Hydro One’s new leadership is moving to generate consistent growth.
After the IPO—one of the largest in Canadian history—Hydro One has moved to acquire three local distribution companies and Great Lakes Power Transmission, which has territory in northwestern Ontario.
Hydro One will operate about 98 per cent of Ontario’s transmission capacity once the Great Lakes Power Transmission deal closes. The former Crown corporation will pay $22 million in cash and assume $151 million of debt.