Financial results for 2007: Hydro-Québec posts income from continuing operations of $2,882 million, up $85 million

    MONTREAL, March 19 /CNW Telbec/ - Income from continuing operations
reached $2,882 million for 2007, up $85 million over 2006. This increase was
chiefly due to a rise of $290 million in net electricity exports, which was
mitigated by a non-recurring foreign exchange gain of $234 million recognized
in 2006.
    It should be noted that net exports represented 5.6% of total sales
volume, but generated 25% of net income.
    Income from discontinued operations totaled $25 million in 2007 and
stemmed mainly from a gain on the sale of Hydro-Québec's interest in
DirectLink, in Australia. This transaction, which closed on February 28, 2007,
marked the completion of the company's disposal of its foreign holdings.
    Hydro-Québec posted net income of $2,907 million in 2007, down
$834 million from 2006. The decrease is primarily due to non-recurring gains
of $917 million on the sale of international assets in 2006.
    Dividends of $2,095 million will be paid to the Québec government for

    Consolidated results

    Revenue totaled $12,330 million in 2007, up 11%. Revenue from electricity
sales rose by $1,434 million to reach $11,985 million.
    In Québec, revenue from electricity sales amounted to $10,368 million,
compared to $9,402 million in 2006. This $966-million increase can be
attributed mainly to lower temperatures in 2007, higher revenue from special
contracts with large industrial customers, and rate adjustments.
    On markets outside Québec, sales revenue totaled $1,617 million, up
$468 million.
    Total expenditure amounted to $6.9 billion, or $784 million more than in
2006. This was largely due to a $247-million increase in purchases of
electricity in excess of the heritage pool by Hydro-Québec Distribution and by
the payment, since January 2007, of water-power royalties by Hydro-Québec
Production to the Québec government, for $263 million.

    Segmented results

    Hydro-Québec Production posted net income of $2,077 million, down
$37 million from 2006, when a non-recurring foreign exchange gain of
$234 million was recognized on debts and swaps denominated in U.S. dollars.
    This result was due to growth in net electricity exports and in net
revenue from special contracts with large industrial customers in Québec (the
risks inherent in these contracts are assumed by Hydro-Québec Production),
partially offset by the payment of water-power royalties since January 2007.
    Hydro-Québec TransEnergie's net income reached $396 million, or
$236 million less than in 2006. This can largely be attributed to
non-recurring revenue of $170 million which had been recognized in the second
quarter of 2006 for native load transmission services for 2005, following a
retroactive decision of the Régie de l'énergie.
    Hydro-Québec Distribution recorded net income of $395 million, up
$353 million over 2006. The factors underlying this variance are a
$145-million reduction in amortization expense associated with regulatory
assets and liabilities for electricity procurement and transmission services,
along with a $211-million decrease in regulatory deferrals for electricity
procurement costs.
    Hydro-Québec Equipement and Société d'énergie de la Baie James (SEBJ)
carried out work for a total of $2,150 million in 2007, compared to
$1,999 million the previous year. Projects under way include the
Eastmain-1-A/Sarcelle/Rupert hydro development and a 1,250-MW interconnection
with Ontario.

For further information:

For further information: Yves Duchesne, Hydro-Québec - Media Relations,
(514) 289-5070,; Press room:

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