Hydro One Q4 net income up on higher demand, rates

Overview

• Ontario electricity provider's Q4 revenue rose yr/yr due to higher demand and approved rates

• Basic EPS for Q4 increased to C$0.39 from C$0.33 in 2024

• Company continues infrastructure investments, partnering with First Nations on projects

Outlook

• Hydro One plans to invest in reliability of Ontario's electricity systems

• Company to construct new transmission lines in partnership with First Nations

• Hydro One aims to complete Welland Thorold Power Line by 2029

Result Drivers

• HIGHER DEMAND AND RATES - Increased revenues were driven by higher peak demand and OEB-approved rates, partially offset by regulatory adjustments

• COST OPTIMIZATION - Lower OM&A costs contributed to improved earnings, attributed to reduced corporate support costs

• CAPITAL INVESTMENTS - Increased capital investments and in-service additions reflect ongoing infrastructure projects and partnerships with First Nations

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 11 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the electric utilities peer group is "buy."

• Wall Street's median 12-month price target for Hydro One Ltd is C$53.00, about 5.3% below its February 12 closing price of C$55.98

• The stock recently traded at 25 times the next 12-month earnings vs. a P/E of 24 three months ago

Press Release: ID:nPnbQ8ZZ6a

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