Hydro One (H) Q4 2023 earnings summary

Executive summary

• 99% of revenue is rate-regulated, with no generation or material commodity-price exposure.

• FY 2023 basic EPS rose 3.4% to $1.81; Q4 EPS was $0.30, unchanged YoY.

• FY 2023 capital investment reached $2.531B, with $2.324B of assets placed in service.

Financial highlights

• FY revenue was $7.844B, up 0.8%; revenue net of purchased power was $4.192B, up 3.4%.

• FY EBIT was $1.842B, up 0.5%, and net income attributable to common shareholders was $1.085B, up 3.3%.

• Q4 revenue was $1.979B, up 6.3%; EBIT was $343M, down 1.4%, and net income was $181M, up 1.7%.

• Q4 financing charges rose $19M and depreciation, amortization and asset removal costs rose $18M YoY.

Outlook and guidance

• 2027 basic EPS guidance is $2.05–$2.26, representing 5%–7% growth from normalized 2023 EPS of $1.61; guidance excludes broadband, LDC acquisitions and 8 of 9 transmission lines.

• Rate base is projected to grow at ~6% CAGR from 2022 to 2027, with no external equity anticipated for the planned capital program.

• Planned regulated capital investments total $3.091B in 2024, declining to $2.391B in 2027.

• Capital plans include Chatham to Lakeshore and Waasigan transmission lines, customer connections, station refurbishments and equipment replacements.