Toronto Hydro Corporation reports its first quarter financial results for 2024
TORONTO, May 8, 2024 /CNW/ - Toronto Hydro Corporation (Toronto Hydro) has announced its financial and operating results for the first quarter ended March 31, 2024.
Selected financial and operational highlights |
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Three months ended |
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March 31 |
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2024 |
2023 |
|
$ |
$ |
|
Distribution revenue |
225.2 |
201.3 |
Net income after net movements in regulatory balances |
33.9 |
44.0 |
Capital expenditures |
199.5 |
156.2 |
Distribution revenue was $225.2 million
- Increase of $23.9 million compared to the prior comparable period.
- The increase was driven by higher revenue collected through Ontario Energy Board-approved rate riders and higher 2024 distribution rates, partially offset by lower electricity consumption.
Net income after net movements in regulatory balance was $33.9 million
- Decrease of $10.1 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 and lower amounts deferred into regulatory accounts.
Capital expenditures were $199.5 million
- Increase of $43.3 million compared to the prior comparable period.
- Capital initiatives in 2024 included the delivery of customer connections, replacement of overhead and underground infrastructures and stations programs.
On March 28, S&P Global Ratings announced its decision to maintain the issuer credit rating and senior unsecured rating for Toronto Hydro at "A" and revised the outlook from "developing" to "stable."
On April 25, DBRS confirmed Toronto Hydro's issuer rating and debentures rating at "A" and the commercial paper rating at R-1(low), each with stable trends.
On May 8, the Board of Directors of Toronto Hydro declared a dividend in the amount of $21.0 million with respect to the second quarter of 2024, which is payable to the City of Toronto by June 28, 2024.
- Toronto Hydro's financial and operational results are reported quarterly and available at torontohydro.com/reports and through sedarplus.ca
- Toronto Hydro is required to submit a plan for proposed rates and spending to the Ontario Energy Board 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 continues to invest in expanding, modernizing and sustaining the foundations of a safe and reliable grid to serve the current and future electricity needs of the homes, businesses and institutions of Toronto, and to prepare the grid and its operations to serve the city's growth and net zero objectives. We're proud of the work that we've accomplished this quarter, and look forward to continuing to support our customers and rapidly growing city."
- Anthony Haines, President and CEO, 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 17 per cent of the electricity consumed in Ontario.
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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; 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 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; and risk associated with Toronto Hydro failing to meet its material compliance obligations under legal and regulatory instruments.
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
Daniel McNeil, Media and Public Relations, 416-903-6845, [email protected]
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