Today, Newfoundland and Labrador Hydro (Hydro) released its Financial Statements and financial results for the second quarter of 2022.

Second Quarter Financial Highlights for 2022:
The Company’s profit for the second quarter was $263 million, an increase of $202 million compared to the same period in 2021. On a year-to-date basis, the Company’s profit was $363 million, an increase of $359 million compared to the same period in 2021. One of the key drivers of the increase in profit for the quarter and year-to-date relates to the reversal of impairment of oil and gas assets recognized during the quarter as a result of the rebound of global oil prices. Impairment and reversals of impairments as a result of volatility in global oil prices are not uncommon in the oil and gas industry. Although they do not directly impact cash flow, impairments and reversals can lead to large fluctuations in profit or loss between financial reporting periods.

Also contributing to the increase in profit for the quarter and year-to-date are financial impacts resulting from bringing the Muskrat Falls assets online, HSE Redetermination, which occurred in first quarter of 2021 and had a significant negative impact on financial results in 2021, and an increase in realized oil and export electricity prices in 2022.

The transition of Nalcor Energy to Hydro is ongoing and impacts on the operating structure will continue to be reflected as further details of the organization’s future structure is finalized. The second quarter 2022 financial results reflect the legal structure at this time and are reported as Nalcor Energy.

Quote:

“We are pleased to report an increase in our net income for the second quarter of 2022. While a main driver of the increase over 2021 relates to the reversal of impairment of our oil and gas assets, we are also seeing an increase in net income relating to the Muskrat Falls assets coming online, the impact of HSE Redetermination which had a negative effect on 2021 income, and a continued increase in realized oil and export electricity prices in 2022 compared to the prior year.” – Lisa Hutchens, VP, Chief Financial Officer.