BUSINESS

Hydro-Quebec Q3 profits drop on electricity contracts with aluminum producers

11/26/2012 03:38 EST | Updated 01/26/2013 05:12 EST
MONTREAL - A hit to electricity contracts with aluminum smelters reduced Hydro-Quebec's profits in the third quarter.

Excluding a charge related to the planned closure of the Gentilly-2 nuclear reactor, the public utility's profits fell 6.9 per cent to $376 million for the period ended Sept. 30. That's down from $404 million a year ago. Including the charge, Hydro-Quebec lost $1.46 billion.

Hydro-Quebec lost $61 million more than a year ago from its contracts with aluminum producers. The causes were aluminum prices which slowed production, the high Canadian dollar, and the purchase from Rio Tinto Alcan of $45 million of electricity. Hydro was forced to make the purchases because of the lockout of employees at Rio Tinto's Alma plant, which ended last summer.

This shortfall was largely offset by an increase of $51 million in revenue from net electricity exports.

Quarterly expenditures rose 2.3 per cent, while revenues grew just 0.3 per cent to $2.62 billion.

Hydro-Quebec also released Monday its second-quarter results, which were never made public for an unknown reason. The net profit in the quarter fell 13.4 per cent to $402 million, from $464 million in the prior year.

Revenues for the second quarter totalled $2.65 billion, down four per cent.