Key Point of President's Regular Press Conference

Announcement of Q2 2021 Financial Results & October 2021 Regular Press Conference: President Hayashi’s Message

October 28, 2021
Chubu Electric Power Co.,Inc.

First, I would like to address the Japan Fair Trade Commission’s on-site inspection conducted on the fifth of this month.
As part of the Japan Fair Trade Commission’s ongoing investigation since the April 13 on-site inspection, a second on-site inspection was recently conducted. I would like to apologize for the great concern this has caused.
We are taking these actions very seriously and continuing to extend our full cooperation with the Japan Fair Trade Commission’s investigation.
I will be discussing the following matters today:

Financial Results for the Second Quarter of FY2021

(Overview of Q2 FY2021 Financial Results)

In the second quarter of FY2021, Chubu Electric Power posted operating revenues of 1,160.4 billion yen.
Application of the Accounting Standard for Revenue Recognition and other factors pushed revenue down by 291.4 billion yen year-on-year.
Although the accounting standard application offset expenses and revenue associated with the Feed-in Tariff Scheme for Renewable Energy and operating revenues declined significantly, there was no effect on income.
Excluding effect of the accounting standard application, revenue increased on the order of 37 billion yen.
Ordinary income came in at 63.6 billion yen.
Although JERA saw an increase in income from its LNG and coal trading business and revenue has improved as the economy rebounds from the Covid-19 pandemic, the time-lag gain turned into a time-lag loss as fuel prices rose reducing income by 101 billion yen. In combination with the negative impact that competition has had on Miraiz’s revenue and the increase in power procurement costs as JPEX prices have risen as well as other factors, this reduced ordinary income by 82.8 billion year-on-year.
Consolidated ordinary income with the time lag removed was 109 billion yen, an increase of roughly 19 billion yen year-on-year.

(Interim dividend)

(FY2021 Business Outlook)

Now, I would like to discuss our business outlook for FY2021.
Taking into account recent business trends, we have revised the financial forecast announced on July 30.
Due to an increase in fuel cost adjustment charges and other factors, consolidated revenue is expected to be 2,500 billion yen, which is an increase of 100 billion yen over the previous announcement.
Although JERA is expected to increase income in the LNG and coal trading business, the time lag loss will likely expand as fuel prices rise and Miraiz’s will also face higher power procurement costs as JPEX prices rise. Because of these and other factors, we forecast consolidated ordinary income to be 45 billion yen, or 65 billion yen below our previously announced figure.
When the time lag effect is removed, we forecast income to be 120 billion yen or 30 billion less than our previously announced figure.
We will continue to closely watch fuel prices and JPEX trends. We fully meet our responsibility for providing a stable supply while placing top priority on safety as we approach winter.
So that we continue to be the corporate group that our customers and society need, we will strive to transform our business model to create and deliver new services, originating in the values that our customers and society demand of us, together with energy.
This ends my presentation.