08/15/2014 03:39 EDT | Updated 10/15/2014 05:59 EDT

OPG earnings rise 60 per cent in Q2 due to increased production

TORONTO - Ontario Power Generation Inc. said its profits rose nearly 60 per cent in the second quarter, helped in large measure by earnings from its nuclear fund and lower depreciation and amortization expenses.

The provincially owned utility, which supplies about half of Ontario's power, said it earned $115 million attributable to the province for the three-month period ended June 30. That compared with net income of $73 million in the same quarter of 2013.

Revenue was flat at $1.1 billion, down from $1.2 billion year over year.

Among positives, earnings on its nuclear fund, the money set aside to pay for future decommissioning of nuclear plants, rose to $217 million from $173 million in the prior-year period. Depreciation and amortization expenses also fell to $181 million from $242 million, while OPG also reported an $8-million income tax recovery versus a $22-million expense in the 2013 quarter.

Meanwhile, the head of OPG said the company is working to bring down costs through downsizing, and other initiatives.

"By 2016, we plan to have saved an estimated $1 billion by reducing the overall headcount from ongoing operations by 20 per cent from 2011 levels, primarily through attrition," president and CEO Tom Mitchell said in remarks accompanying the report.

"To date, the departure of 1,900 people since January 2011 has already saved $400 million."

OPG has also closed Ontario's coal facilities without any disruption to the safety or reliability of operations, Mitchell said.

"This delivers the government's commitment to cleaner air and represents North America's single largest greenhouse gas reduction initiative to-date. OPG's generation is now almost one hundred per cent free of greenhouse gas and smog causing emissions."

The utility said total electricity generated for the period amounted to 19.8 terawatt hours, flat against 20 TWh in the same quarter in 2013, mainly due to less power generation from its hydroelectric stations.