TORONTO, Aug. 15,
2024 /CNW/ - Toronto Hydro Corporation (Toronto
Hydro) has announced its financial and operating results for the
second quarter ended June 30, 2024.
Selected financial
and operational highlights
(in millions of
Canadian dollars)
|
|
Three months
ended
June
30
|
Six months
ended
June
30
|
|
2024
$
|
2023
$
|
2024
$
|
2023
$
|
|
|
|
|
|
Distribution
revenue
|
233.7
|
207.9
|
458.9
|
409.2
|
Net income after net
movements in regulatory balances
|
42.4
|
36.2
|
76.3
|
80.2
|
Capital
expenditures
|
217.2
|
183.2
|
416.7
|
339.4
|
KEY FINANCIAL HIGHLIGHTS
Distribution revenue was $458.9
million
- Increase of $49.7 million
compared to the prior comparable period.
- The increase was driven by higher revenue collected through
Ontario Energy Board (OEB)-approved rate riders, higher 2024
distribution rates and higher electricity consumption.
Net income after net movements in regulatory balance was
$76.3 million
- Decrease of $3.9 million compared
to the prior comparable period.
- The decrease was primarily due to lower other gains related to
variable consideration recognized in the prior period, as well as
higher financing costs, higher operating expenses, and higher
depreciation and amortization expense.
- This was partially offset by higher distribution revenue, lower
income taxes and lower amounts deferred into regulatory
accounts.
Capital expenditures were $416.7
million
- Increase of $77.3 million
compared to the prior comparable period.
- Capital initiatives in 2024 included the delivery of customer
connections, replacement of overhead and underground
infrastructures and customer-initiated plant relocations and
expansions.
CORPORATE DEVELOPMENTS
On June 25, the terms of Howard
Wetston, Heather Zordel,
Michael Nobrega and Mary Ellen Richardson as directors of Toronto
Hydro ended.
On June 26, City Council extended
the appointment of David McFadden as
member and chair of Toronto Hydro's Board of Directors and also on
the same date, appointed the following candidates to Toronto
Hydro's Board of Directors: Michael
Eubanks, James Hinds,
Ersilia Serafini, Sheila Block, Joyce
McLean and Ken Neumann.
On June 28, the City of Toronto (City) and Toronto Hydro
agreed on the City making new equity investments in
Toronto Hydro totalling $300.0
million, including a one-time upfront special equity
investment of $50.0 million by 2025
and multi-tranche annual equity contributions of $25.0 million over 10 years beginning in
2025. In addition to these equity investments, City Council
also approved amendments to Toronto Hydro's Shareholder Direction,
which set out targets for reduced dividends from Toronto Hydro to
the City for the period between 2025 and 2034.
On July 16, S&P Global Ratings
announced its decision to maintain the issuer rating and senior
unsecured debentures rating for Toronto Hydro at "A" and revised
the issuer rating outlook from "stable" to "positive."
On Aug. 14, Toronto Hydro's Board
of Directors approved the appointment of Jana Mosley as President and Chief Executive
Officer, effective as of Aug. 15.
On Aug. 14, Toronto Hydro's Board of Directors declared a
dividend in the amount of $21.0
million with respect to the third quarter of 2024, which is
payable to the City by Sept. 27,
2024.
QUICK FACTS
- Toronto Hydro's financial and operational results are reported
quarterly and available at torontohydro.com/corporate-reports and
through sedarplus.ca
- Toronto Hydro is required to submit a plan for proposed rates
and spending to the OEB through an open and transparent process
known as rate application
- Toronto Hydro continues to invest in its grid to maintain
safety and reliability, support a growing city, enable clean
energy, and prepare for and respond to extreme weather. For more
information please visit torontohydro.com/investmentplan
QUOTE
"Toronto Hydro remains committed to providing safe and reliable
electricity to the many homes and businesses of Toronto, while continuing to invest in
expanding, modernizing and sustaining the grid and our operations
to meet the current and future needs of our customers."
- Jana Mosley,
President and CEO, Toronto Hydro
ABOUT TORONTO HYDRO
Toronto Hydro is a holding company which wholly owns two
subsidiaries:
- Toronto Hydro-Electric System Limited (THESL) – distributes
electricity; and
- Toronto Hydro Energy Services Inc. – provides streetlighting
and expressway lighting services in the city of Toronto
The principal business of Toronto Hydro and its subsidiaries is
the distribution of electricity by THESL, which owns and operates
the electricity distribution system for Canada's largest
city. Recognized as a Sustainable Electricity Leader™ by
Electricity Canada, it has approximately 794,000 customers located
in the city of Toronto and distributes approximately 18
per cent of the electricity consumed in Ontario.
SOCIAL MEDIA ACCOUNTS
X: x.com/torontohydro
Instagram: instagram.com/torontohydro
Facebook: facebook.com/torontohydro
YouTube: youtube.com/torontohydro
LinkedIn: linkedin.com/company/toronto-hydro
FORWARD-LOOKING INFORMATION
Certain information included in this news release constitutes
"forward-looking information" within the meaning of applicable
securities legislation. All information, other than statements of
historical fact, which address activities, events or developments
that we expect or anticipate may or will occur in the future, are
forward-looking information. The words "anticipates", "believes",
"budgets", "can", "committed", "continual", "could", "estimates",
"expects", "focus", "forecasts", "further notice", "future",
"impact", "increasingly", "intends", "may", "might", "once",
"plans", "propose", "projects", "schedule", "seek", "should",
"trend", "will", "would", "objective", "ongoing", "outlook" or the
negative or other variations of these words or other comparable
words or phrases, intended to identify forward-looking information,
although not all forward-looking information contains these
identifying words. The purpose of the forward-looking information
(including any financial outlook) contained herein is to provide
Toronto Hydro's current expectations regarding its future results
of operations, performance, business prospects and opportunities
and readers are cautioned that such information may not be
appropriate for other purposes. All forward-looking information is
given pursuant to the "safe harbour" provisions of applicable
Canadian securities legislation.
Specific forward-looking information in this news release
includes, but is not limited to, statements regarding: the
settlement variance and other regulatory balance variances; the
planned capital expenditures, including the replacement of
underground and overhead infrastructures, station programs,
delivery of customer connections and customer initiated plant
relocations and expansions; the impact on Toronto Hydro's operating
results and financial position in the future due to uncertain
economic factors, including macroeconomic factors and local market
forces such as inflationary pressures, an elevated interest rate
cost environment, indeterminate levels of customer consumption, and
a global recession; Toronto Hydro's reliance on debt financing
through its MTN Program, Commercial Paper Program or existing
credit facilities to finance Toronto Hydro's daily operations,
repayment of existing indebtedness, and funding of capital
expenditures; the continued ability of Toronto Hydro to arrange
sufficient and cost-effective debt financing in order to meet its
short-term and long-term obligations; the impact on Toronto Hydro's
financial health and performance due to changes in economic,
policy, customer preference or technological conditions that reduce
the demand for electricity; appointment of Jana Mosley as the new President and Chief
Executive Officer of Toronto Hydro; receipt of the equity
investments from the City of
Toronto and payment of dividends to the City of Toronto as shareholder; the targeted
dividends payable by Toronto Hydro to the City for the years 2025
to 2034; and the effect of changes in interest rates and discount
rates on future revenue requirements and future post-employment
benefit obligations, respectively.
The forward-looking information reflects Toronto Hydro's current
beliefs and is based on information currently available to Toronto
Hydro. The forward-looking information is based on estimates and
assumptions made by Toronto Hydro's management in light of past
experience and perception of historical trends, current conditions
and expected future developments, as well as other factors that
management believes to be reasonable in the circumstances,
including, but not limited to, the amount of indebtedness of
Toronto Hydro, changes in funding requirements, the future course
of the economy and financial markets, no unforeseen delays and
costs in Toronto Hydro's capital projects, no unforeseen changes to
project plans, compliance with covenants, the receipt of favourable
judgments, no unforeseen changes in electricity distribution rate
orders or rate setting methodologies, no unfavourable changes in
environmental regulation, the ratings issued by credit rating
agencies, the level of interest rates and Toronto Hydro's ability
to borrow and assumptions regarding general business and economic
conditions.
Forward-looking information is subject to risks, uncertainties
and other factors that could cause actual results to differ
materially from historical results or results anticipated by the
forward-looking information. The factors which could cause
results or events to differ from current expectations include, but
are not limited to, risks associated with the execution of LDC's
capital and maintenance programs necessary to maintain the
performance of aging distribution assets and make required
infrastructure improvements, including to deliver a modernized grid
and meet electrification requirements to achieve government net
zero GHG emissions targets; risks associated with capital projects;
risks associated with changing weather patterns due to climate
change and resultant impacts to electricity consumption based on
historical seasonal trends; risks of changing government policy and
regulatory requirements, including in respect of climate change and
energy transition; risks of municipal government activity,
including the risk that the City could introduce rules, policies or
directives, including those relating to net zero GHG emissions
targets, that can potentially limit Toronto Hydro's ability to meet
its business objectives as laid out in the Shareholder Direction
principles; risks of being unable to retain necessary qualified
external contracting forces relating to its capital, maintenance
and reactive infrastructure program; risk that Toronto Hydro is not
able to arrange sufficient and cost-effective debt financing to
repay maturing debt and to fund capital expenditures and other
obligations; risk that Toronto Hydro is unable to maintain its
financial health and performance at acceptable levels; risk that
insufficient debt or equity financing will be available to meet
Toronto Hydro's requirements, objectives, or strategic
opportunities; risk of downgrades to Toronto Hydro's credit rating;
risks related to the timing and extent of changes in prevailing
interest rates and discount rates and their effect on future
revenue requirements and future post-employment benefit
obligations; risks arising from inflation, the course of the
economy and other general macroeconomic factors; risk associated
with the impairment to Toronto Hydro's image in the community,
public confidence or brand; risk associated with Toronto Hydro
failing to meet its material compliance obligations under legal and
regulatory instruments; and risks associated with market
expectations with respect to increase in demand for
electricity.
The Corporation cautions the reader that the above list of
factors is not exhaustive, and there may be other factors that
cause actual events or results to differ materially from those
described in forward-looking information. Some of the other factors
are discussed more fully under the heading "Risk Factors" in
Toronto Hydro's annual information form for the year ended
December 31, 2023.
All forward-looking information in this document is qualified in
its entirety by the above cautionary statements. Furthermore,
unless otherwise stated, all forward-looking information contained
herein is made as of the date hereof and Toronto Hydro undertakes
no obligation to revise or update any forward-looking information
as a result of new information, future events or otherwise, except
as required by law.
SOURCE Toronto Hydro Corporation