Hydro One (H) Q1 2025 earnings summary

Executive summary

• One of North America's largest electric utilities, operating a pure-play, rate-regulated transmission and distribution business with no generation or commodity price exposure, serving 90% of Ontario's transmission capacity and 75% of its geography.

• Over 1.1 million service restorations were performed after a major Ontario ice storm, with substantial support from other utilities and contractors.

• Completed the acquisition of a 48% stake in the East-West Tie Transmission Line for approximately $261 million, immediately contributing to earnings and enhancing the transmission network.

• Received industry recognition for public safety and sustainability initiatives, including EDA Public Electrical Safety and Sustainability Excellence Awards.

• Annualized dividend of $1.3324 per share with a 70–80% payout ratio, supported by expanding rate base and efficiency gains.

Financial highlights

• Q1 2025 consolidated revenue rose 11.2% year-over-year to $2,408M; net income increased 22.2% to $358M; basic EPS was $0.60, up 22.4%.

• Revenues net of purchased power increased 11% year-over-year; transmission revenues rose 15%, distribution revenues up 6.3%.

• OM&A expenses rose 3.1% year-over-year, with transmission segment costs up 6.6% and distribution up 0.6%.

• Capital investments in Q1 2025 totaled $735M, up 9.2% year-over-year, with $423M in new assets placed in service.

• Board declared a quarterly dividend of $0.3331 per share, payable June 11 or June 30, 2025.

Outlook and guidance

• EPS expected to grow 6–8% annually through 2027, with 2027 guidance of $2.15–$2.37, using normalized 2022 EPS as a base.

• Rate base forecast to grow from $23.6B in 2022 to $31.8B in 2027, supported by an $11.8B capital plan.

• No equity issuance anticipated for planned capital investments; growth is self-funded.

• Ongoing focus on cost management, productivity, and maintaining fiscal prudence within approved budget envelopes.

• Effective tax rate expected to remain between 13% and 16% for the remainder of the JRAP period.