Key Point of President's Regular Press Conference

January 2017 Regular Press Conference : President Katsuno's Message

January 31, 2017
Chubu Electric Power Co.,Inc.

Today I will be discussing the following three matters:
- FY2016 third quarter financial results
- Chubu Electric Power’s efforts toward full gas retail deregulation
- Establishment of Tokyo Sales Department
- Chubu Electric Power’s executive officers and other matters

FY2016 third quarter financial results

I would like to speak about FY2016 third quarter financial results.
Chubu Electric Power’s consolidated sales for the third quarter of FY2016 recorded 1,898.7 billion yen.
Because of a drop in fuel adjustment costs, lighting power charges declined. This resulted in a 227.7 billion yen decline on a year-on-year basis.
The consolidated ordinary income marked 157.4 billion yen.
Following the dropping fuel prices, the different-timing margin of both fuel adjustment and fuel costs shrank. This resulted in a 57.8 billion yen profit decrease on a year-on-year basis.
Turning to non-consolidated financial results, sales stood at 1,755.5 billion yen. This is a 224.3 billion yen decrease year on year.
Ordinary income marked 143.5 billion yen. This is a 55 billion yen profit decrease year on year.
Regarding the earnings outlook for FY2016, no change has been made to the forecasted earnings values of second quarter financial results, announced on October 28.
Consolidated sales are expected to mark 2,590 billion yen.
Because of a drop in fuel prices, the different-timing margin of fuel adjustment and fuel costs shrank; regardless, Chubu Electric Power is expecting a consolidated ordinary income of 125 billion yen, given the increase in hydropower generation and efforts to further streamline management. This amount is unchanged from previously announced numbers.

Chubu Electric Power’s efforts toward full gas retail deregulation

I now turn to gas rate menus announced yesterday.
Chubu Electric Power sees the full gas retail deregulation starting this April as a good opportunity for expanding total energy service, where we can suggest both electricity and gas to residential customers in a need-based manner.
The arranged rate menus are three KatEne plans for households and four BizEne plans for businesses. These options are tailored to how much and in what way customers consume gas.
The menus are more reasonable and readily understandable than the gas rates offered by Toho Gas. We at Chubu Electric Power can recommend our menus to customers with confidence.
If customers sign a contract both for electricity and gas, 2% will be discounted off gas rates.
Adding this price cut will make for a competitive rate menu for customers consuming 31 m3 each month, the average amount for households. For instance:
- Customers can save around 11,100 yen over two years or roughly 8% compared with current Toho Gas rates;
- Customers can save around 9,100 yen over two years or roughly 7% compared with new Toho Gas rates
As we have been repeatedly informing, Chubu Electric Power will responsibly engage in security, an aspect customers place weight on when choosing gas companies.
In an effort to strengthen security operations that enable customers to confidently use Chubu Electric Power’s gas, yesterday we signed a new consignment agreement with three firms well-versed in gas security in addition to Iwatani Corporation.
We will accordingly put in place a system encompassing 300 staff members and 28 business sites engaging in our gas security, and in turn swiftly and flexibly address both customer requests and concerns.
To have customers reliably use our gas, continued efforts will be made in raising the quality of security operations.
We at Chubu Electric Power have set a challenging goal of acquiring 200,000 new customers in the coming five years.
Aiming to attain this goal, we will work as a leading total energy service company to provide service that can contribute to the comfortable lives of customers.

Establishment of Tokyo Sales Department

I now turn to the establishment of the Tokyo Sales Department aimed to strengthen Chubu Electric Power’s sales system in Tokyo and neighboring prefectures.
As an effort to further reinforce Chubu Electric Power’s sales system in the Tokyo metropolitan area, we at Chubu Electric Power decided to establish the Sales Company’s Tokyo Sales Department in April.
By assigning headquarter division heads and personnel equivalent to such levels as the Department’s manager, and by partially allocating to these members the authority to execute business in the Tokyo area, we will expedite decision-making processes and promote sales activities.
We at Chubu Electric Power have been stationing corporate customer sales and engineering personnel in Tokyo, but in addition to corporate sales activities the new Tokyo Sales Department will engage in sales activities geared toward households, such as marketing the KatEne plan and seeking new business partners.
With the Tokyo Sales Department serving as a driving force, we will roll out sales activities together with Diamond Power Corporation and Cenergy Co., Chubu Electric Power’s group companies.
Chubu Electric Power’s targets are:
- Over the short term, acquiring 100,000 residential customers in the Tokyo metropolitan area at the earliest possible timing, and
- Over the long term, acquiring 20,000,000,000 kWh within non-Chubu areas in 2030, with a particular focus on the Tokyo metropolitan area
To reach these sales targets, we will bring together all our Group’s resources to engage in sales activities in Tokyo and neighboring prefectures.

Chubu Electric Power’s executive officers and other matters

Lastly, I turn to Chubu Electric Power’s executive officers and other matters.
The business environment around Chubu Electric Power is undergoing a drastic change amid the full retail deregulation of electric power and gas.
Facing this historical turning point, Chubu Electric Power is seeking to survive competition and thrive further. To this end, efforts are underway to become a leading total energy service corporation group that creates new value for customers.
As one initiative for attaining this goal, Chubu Electric Power launched an internal company system last April looking to organize an independent corporate structure on a per-operation basis.
I would like to introduce the new executive system decided today to continue reinforcing this initiative. The system comes into effect as of April 1.
First I introduce Representative Directors and Managing Executive Officers.
Mr. Akinori Kataoka and Mr. Chiyoji Kurata will take over as the new Director and Executive Vice President.
Both Mr. Kataoka and Mr. Kurata have already been well engaged in Chubu Electric Power’s operations. I am confident that they will appropriately manage and bring growth to each business.
A new Senior Managing Executive Officer will be appointed as well.
Mr. Sakaguchi and Mr. Ohno, both currently Director and Executive Vice President, will start serving as Directors in April.
Now I turn to executive officers and division heads.
Well-experienced personnel who excel in strategy-building, managing skills, and leadership will be assigned to appropriate positions. At the same time, we again will not hesitate in appointing young, competent members to stimulate Chubu Electric Power’s organization.
A new executive officer will be assigned to head the freshly launched Tokyo Sales Department.
Finally, I turn to retiring officers.
On March 31, six executive officers and one counselor will retire.
Under the new executive system decided today, we at Chubu Electric Power will maintain our unwavering mission of providing a stable supply of energy, work continuously toward creating yet-to-be-seen new service and value for customers, and accordingly achieve further development. We look forward to your support.
That concludes this conference.

Back to list