Hydro One (H) Q2 2025 earnings summary

Executive summary

• Net income attributable to common shareholders rose 12% year-over-year to $327 million for Q2 2025, with basic EPS increasing to $0.54 from $0.49, driven by higher OEB-approved rates and increased energy consumption, partially offset by higher depreciation, asset removal, and financing costs.

• Revenue for the quarter was $2,066 million, up 1.7% from Q2 2024, with revenues net of purchased power increasing 7% year-over-year to $1,167 million.

• Capital investments reached $913 million in Q2, with $591 million of new assets placed in service, supporting reliability and growth.

• Major collective agreements were renewed, and the company was recognized for sustainability and corporate citizenship by Corporate Knights, Forbes, and TIME Magazine.

• Significant operational challenges included a severe March 2025 ice storm, resulting in $225 million in restoration costs and community support initiatives.

Financial highlights

• Basic EPS for Q2 2025 was $0.54, up 10.2% year-over-year; net income margin improved with net income of $327 million on $2,066 million in revenue.

• OM&A costs were stable at $320 million, with lower distribution OM&A offsetting higher transmission OM&A.

• Depreciation, amortization, and asset removal costs rose 9.5% to $288 million, mainly due to storm restoration and asset growth.

• Financing charges increased 7.6% to $169 million, reflecting higher long-term debt.

• Net cash from operating activities was $605 million, down from $746 million in Q2 2024.

Outlook and guidance

• Guidance targets 6–8% EPS CAGR through 2027, using 2022 normalized EPS of $1.61 as a base, with projected EPS reaching $2.15–$2.37.

• Rate base expected to grow from $23.6B in 2022 to $32.1B in 2027, a ~6% CAGR.

• Ongoing and future capital investments are planned to support Ontario’s growing energy demand, with $3.5 billion projected for 2025.

• A Z-Factor application has been submitted to recover $225 million in storm-related costs.

• Dividend growth expected to average ~6% annually, supported by expanding rate base.