TORONTO, Aug. 22, 2018 /CNW/ - Toronto Hydro Corporation (the "Corporation") today announced its consolidated financial and operating results for the three and six months ended June 30, 2018.
Net income, after net movements in regulatory balances for the six months ended June 30, 2018, was $85.0 million compared to $74.6 million for the comparable period in 2017. The increase over the previous year was primarily due to the implementation of new electricity distribution rates and higher electricity consumption resulting from warmer weather relative to 2017. This increase was partially offset by higher operating expenses related to emergency power restoration, as a result of major storms in 2018, and ongoing system maintenance. Implementation of the Ontario Energy Board (OEB) approved 2018 rate riders saw a return of $47.3 million to customers which is reflected in a reduction of top-line distribution revenue. However, this rate reduction did not impact net income after net movements in regulatory balances as there was a corresponding increase in net movements in regulatory balances, given IFRS treatment.
The Corporation continues to invest in the grid to address safety, reliability, support a growing city and meet customer service needs.
Selected Financial Highlights (in millions of Canadian dollars)
Three months ended June 30
Six months ended June 30
Net income after net movements in
The unaudited condensed interim consolidated financial statements and related Management's Discussion and Analysis (presented in Canadian Dollars) are available on the Corporation's website www.torontohydro.com or through SEDAR's website www.sedar.com.
QUOTE – "While we've been enjoying a warm summer, the heat brought several extreme weather events this past quarter, underscoring the importance of Toronto Hydro's emergency preparedness and grid resiliency. As we remain committed to strong financial performance, we're continuing to invest in our infrastructure and distribution technologies, safety and customer service to strengthen our grid and operations." - Anthony Haines, President and CEO, Toronto Hydro
CORPORATE DEVELOPMENTS On January 16, 2018, the Corporation entered into an agreement to sell a property including land and buildings to a third party and closed the sale on April 17, 2018. A net gain of $98.6 million was recognized and deferred as a regulatory credit balance, which reduces future electricity distribution rates for customers.
On August 15, 2018, THESL filed a rate application with the OEB under the Custom Incentive Rate-setting method which sought approval of THESL's 2020 test-year revenue requirement on a cost of service basis, and the subsequent annual rate adjustments based on a custom index specific to THESL for the period commencing on January 1, 2021 and ending on December 31, 2024. The rate application requests approvals to fund capital expenditures of approximately $2.8 billion over the 2020-2024 period.
On August 22, 2018, the Board of Directors of the Corporation declared a quarterly dividend in the amount of $23.5 million, payable to the City of Toronto by September 28, 2018.
ABOUT TORONTO HYDRO The Corporation is a holding company which wholly owns two subsidiaries:
Toronto Hydro-Electric System Limited (THESL) – distributes electricity and engages in conservation and demand management activities; and
Toronto Hydro Energy Services Inc. – provides street lighting and expressway lighting services in the city of Toronto.
The principal business of the Corporation and its subsidiaries is the distribution of electricity by THESL, which owns and operates the electricity distribution system for Canada's largest city. A leader in conservation and demand management, it has 769,000 customers located in the city of Toronto and distributes approximately 19% of the electricity consumed in Ontario.
FORWARD-LOOKING INFORMATION Certain information included in this news release constitutes "forward-looking information" within the meaning of applicable securities legislation. The purpose of the forward-looking information is to provide management's expectations regarding the Corporation's future results of operations, performance, business prospects and opportunities and may not be appropriate for other purposes. All forward-looking information is given pursuant to the "safe harbour" provisions of applicable Canadian securities legislation. The words "can", "could", "will" and similar expressions are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words. The forward-looking information reflects management's current beliefs and is based on information currently available to the Corporation's management.
The forward-looking information in this news release includes, but is not limited to, statements regarding the Corporation's plans and expectations regarding the current rate application under the Custom Incentive Rate-setting method. The statements that make up the forward-looking information are based on assumptions that include, but are not limited to, the outcomes regarding the current rate application under the Custom Incentive Rate-setting method.
The 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 the Corporation's capital and maintenance programs necessary to maintain the performance of our distribution assets and make required infrastructure improvements; risks associated with electricity industry regulatory developments and other governmental policy changes; risks associated with the timing and results of regulatory decisions regarding the Corporation's revenue requirements, cost recovery and rates; risk that the Corporation is not able to arrange sufficient and cost-effective debt financing to fund capital expenditures and other obligations; and risk of downgrades to the Corporation's credit rating.
All forward-looking information in the news release is qualified in its entirety by the above cautionary statements and, except as required by law, the Corporation undertakes no obligation to revise or update any forward-looking information as a result of new information, future events or otherwise after the date hereof.
Toronto Hydro Corporation is a holding company which wholly owns two subsidiaries: Toronto Hydro-Electric System Limited (THESL) — which distributes electricity; and Toronto Hydro Energy Services Inc. — which provides streetlighting and expressway lighting services in the...