Chubu Electric Power Co.,Inc. | October 2018 Regular Press Conference : President Katsuno's Message - Key Point of President's Regular Press Conference (2018)

Key Point of President's Regular Press Conference (2018) October 2018 Regular Press Conference : President Katsuno's Message

October 26, 2018

Chubu Electric Power Co.,Inc.

  • I will be discussing the following matters today:
    • FY2018 second quarter financial results
    • Challenges identified through Typhoons Jebi and Tremi
    • Start of low-voltage type electricity sales in the Kansai Area

FY2018 second quarter financial results

  • I am going to address the “financial results of the second quarter FY2018.”
  • Chubu Electric Power’s consolidated sales for the second quarter of FY2018 was 1 trillion 487.4 billion yen. While electricity sales fell, increases in fuel cost adjustments, subsidies pertaining to renewable energy have resulted in a 94.1 billion yen increase in revenue on a year-by-year basis.
  • Consolidated ordinary income was 94.2 billion yen.
  • The following factors resulted in its change. While losses due to cut off errors expanded and electricity power sales fell, the start of operations of the world’s most thermally efficient Nishi-Nagoya Thermal Power Station, progress on the streamlining of the organization, reductions in thermal fuel costs with the increase in hydroelectricity produced, and increases in the electricity power sales to other utilities have combined led to an increase in profits of 6.8 billion yen.
  • Profits outside of cut off errors was around 132 billion yen, and profits increased by around 32 billion yen.
  • Chubu Electric Power’s interim dividends were set at 20 yen per share.
  • As for the earnings outlook for FY2018, the forecasted earning values announced on July 31 have been corrected to reflect the latest performance trends.
  • Due to increases in electricity sales from the summer heat and other factors, consolidated sales are expected to be 3 trillion yen: a 20 billion increase in revenue from the last announcement.
  • Consolidated ordinary income is expected to be around 100 billion. While losses due to the cut off errors are expanding from rising fuel prices, improvements in the balance sheet from the increases in electricity power sales support the forecasted consolidated ordinary income of 100 billion, unchanged from the last announcement.
  • Profits excluding cut off errors are expected to be around 160 billion yen, up 10 billion yen from the last announced figures, reaching the management target of 150 billion yen.
  • Chubu Electric Power will maintain company-wide efforts to streamline its management, increase revenue, and meet the expectation and trust of customers, shareholders and society.

Challenges identified through Typhoons Jebi and Tremi

  • Next, I am going to address “the challenges identified through Typhoons Jebi and Tremi”.
  • First, I would like to express my heartfelt sympathies for the people affected by Typhoon Tremi that swept over the Chubu region from September 30 to October 1.
  • This typhoon passed over the Chubu region maintaining its intensity, causing broad damage from flying galvanized iron roof panels in the plains and fallen trees in mountainous areas. Blackouts occurred in the whole Chubu region.
  • Outages were of the largest scale in the Heisei era, with approximately 1.19 million households experiencing outages, especially across Shizuoka where 780 thousand households were blacked out.
  • I deeply apologize for all the immense trouble and inconvenience that this may have caused.
  • Chubu Electric Power has been strengthening the emergency disaster system to prepare for natural disasters such as typhoons using accumulated experience. This year’s blackout however, have made us acutely aware of the many challenges that we still have to overcome, with the extended blackout and troubles in disseminating information on the state of the blackout and prospects for restoration.
  • We have been remonstrated by and have received many requests from our customers and municipalities regarding our response to the typhoon.
  • We have established a “Typhoon Jebi/Tremi Emergency Disaster Response Verification Committee” with myself as the chairperson to apply what we learned through this experience in responding to future disasters.
  • This Verification Committee has categorized the issues in to three broad groups.
  • The first category is the “equipment recovery system”.
  • We will be exploring measures to maximize recovery efficiency by dispatching recovery personnel in advance to places expected to be hit by the storm, and discussing methods to grasp the state of the damage quickly.
  • The second category is “disseminating information to customers”.
  • Chubu Electric Power strived to disseminate information about outages through our homepage, twitter account and other social media outlets, and radio among others. But we recognize that we fell short on “swiftness” and “accuracy” when communicating the estimated recovery time.
  • We will be studying methods to “swiftly” and “in an understandable manner” convey the status of the outages and recovery information.
  • The third category is “information sharing/cooperate with the municipalities”.
  • Cooperation with municipalities will be vital in cutting down trees likely to fall in a typhoon in advance and recovering power quickly.
  • We will be building a system that swiftly gathers and shares in a timely manner information necessary for cooperation.
  • We will be studying these challenges as a company and speedily discussing future responses to report to our customers and the municipalities.
  • The government has also established an Electricity Resilience WG as part of a comprehensive review of important infrastructure to discuss building a supply structure that is resilient against disasters.
  • The lessons extracted from our company will be reflected in this Electricity Resilience WG and the conclusions reached in the WG in turn will be incorporated into our company’s responses.

Start of low-voltage type electricity sales in the Kansai Area

  • Finally, I would like to talk about the “start of low-voltage type electricity sales in the Kansai area”.
  • Chubu Power Electric has been selling electricity in the Kansai area based on the requests of special high voltage and high voltage corporate customers with whom we already had contracts starting in April 2018. Starting in early November, we will also be expanding our electricity retail services to corporate customers in the low-voltage area through partner companies.
  • Our business foundation in the Kansai area is lacking and we will differentiate ourselves by providing desirable products with added value by creating marketing alliances with a variety of businesses in a variety of areas, bundling our electricity or IoT services with partner companies’ product.
  • We are expanding our group of partner companies, preparing to set up sales collaboration with multiple businesses versed in home life and in business operation.
  • The Kansai is a desirable market with the second highest demand in the country, but as such also a highly competitive region.
  • We will strive to meet our customer’s expectations through our built-up sale capabilities and collaboration with various companies in different fields.
  • This ends my presentation.