Key Point of President's Regular Press Conference

Key Point of President's Regular Press Conference

May 2020 Regular Press Conference : President Hayashi's Message

May 18, 2020
Chubu Electric Power Co.,Inc.

  • I will be discussing the following matters today:
  • FY2019 Financial Results
  • Chubu Electric Power’s COVID-19 Response

FY2019 Financial Results

  • I would like to begin by providing an overview of our FY2019 financial results.
  • FY2019 consolidated operating revenues totaled 3.659 trillion yen.
  • Despite a decrease in electric energy sales, Chubu Electric Power raised operating revenues by 30.8 billion yen year-on-year principally due to an increase in fuel cost adjustment charges as well as a rise in surcharges and grants payable under the Act on Special Measures Concerning Procurement of Electricity from Renewable Energy Sources by Electricity Utilities.
  • Ordinary income amounted to 191.8 billion yen. The preceding period saw a time-lag loss, while, this term, the time-lag loss turned into a time-lag gain, which, in combination with other factors, resulted in an increase of 78.8 billion yen year-on-year.
  • However, when the time-lag effect is removed, ordinary income was approximately 153 billion yen.
  • Although we searched painstakingly for ways to increase efficiency, the effects of competition for sales, adverse accounting impact of transferring our thermal power generation business, and other factors coalesced to result in a decrease of approximately 10 billion yen year-on-year.
  • We find that COVID-19 had limited impact on our FY2019 financial results.
  • As for our FY2020 business outlook…
  • We have been unable to formulate a practical estimate of the effect of COVID-19 on electric energy sales and other business, so we are currently not in a position to issue a business forecast at this time.
  • Electric energy sales in the Chubu area decreased 7% in April, a significant year-on-year decline due to the underlying economic stagnation and other adverse factors.
  • In addition, preliminary figures for the period from May 1 to May 17 indicate that area demand, as calculated on a sending-end basis, was 15% lower year-on-year, shaped by a greater number of non-business days relative to the same period last year.
  • COVID-19 has also affected service, retail, and a broad range of other industries. This pandemic may surpass the global financial crisis, the impact of which was felt principally in export industries. There is concern that COVID-19 may severely strain cash flow.
  • For reference, during the global financial crisis, electric energy sales fell 10% over an entire year.
  • Once we are able to put together a reasonable projection, we will promptly announce our fiscal year business forecast.
  • Next, I would like to address dividends.
  • In accordance with our shareholder return policy of maintaining stable dividend distributions and passing on income growth to shareholders, we plan to distribute a 25 yen per share year-end dividend for FY2019, just as we did for the interim dividend.
  • In our FY2020 dividend forecast, we foresee COVID-19 having a particularly adverse effect on income. However, based on our shareholder return policy mentioned earlier, we plan to disperse a 50 yen per share dividend over the accounting year, which sustains the annual dividend level disbursed in FY2019.
  • That is all regarding our financial situation.

Chubu Electric Power’s COVID-19 Response

  • Continuing on, I would like to discuss the Chubu Electric Power Group’s efforts to cope with COVID-19.
  • We place the highest priority on the safety and health of our employees, their families, business partners, and customers. Our entire group has been working together to prevent the spread of COVID-19. We have adopted measures, which include maximizing telecommuting, that are grounded in our intent to maintain a stable supply and level of service with the ultimate goal of ensuring that we maintain the necessary backup personnel to handle any contingency.
  • Although Japan has lifted the state of emergency declared for the Chubu area, we continue to maintain the same operating system as we have always had, which is based on the concept that “electric power is the infrastructure supporting all infrastructures,” and we have been proceeding with a careful and meticulous review for the future.
  • Moreover, even if a major natural disaster or other such event occurs, we will be ready to commit the maximum number of personnel necessary while concurrently implementing measures to prevent COVID-19 infections, including the adoption of measures to decentralize our recovery bases and other actions to minimize contact among recovery personnel.
  • Next, I would like to talk about the assistance measures that Chubu Electric Power Miraiz, our retail electricity business company, has been providing customers.
  • Chubu Electric Power Miraiz has handled approximately 8,000 consultations regarding electricity and gas bill payment deadlines in addition to consultations from business customers about significant changes in their sales and operating situations. In these conversations, we have proposed optimal rate plans as well as suggested contract revisions that will reduce electricity charges.
  • In addition, we are utilizing our Kate-Ene [for individual households] and Biji-Ene [for business customers] online services to provide improved and enhanced content supporting individual customers in their lives at home as well as businesses, in addition to furnishing information on how to apply for subsidies and other useful topics.
  • In the future, we will provide more specific proposals detailing optimal rate plans and energy services tailored to customers’ power use. We hope to deliver a range of services that are helpful to both individual households and businesses.
  • One such service that we just introduced for households with small children is a summer electricity discount plan.
  • Chubu Electric Power Miraiz will provide more detailed information later about the discount, how to apply, and other necessary information. To the greatest extent possible, we want to help our customers benefit from air conditioning and other electrical appliances so that the time they spend at home is even more comfortable as they make up for delays in schoolwork due to childcare, school and other closures, which continue to impact people’s lives.
  • We will continue to conscientiously take to heart our business customers’ circumstances. In addition to contract consultations, we will propose ways to further save energy as well as other solutions.
  • Lastly, as our customers and society grow and advance, so has the Chubu Electric Power Group, and we will continue to walk hand-in-hand toward the future.
  • Although the COVID-19 predicament has made it very difficult to anticipate what lies ahead, governments, companies, individuals, and all of the members of society are right now doing everything that we can to combat this virus.
  • So that we can make it through these very tough times together, the Chubu Electric Power Group will continue to deliver safe, inexpensive, and stable energy, as well as endeavor to provide services useful to our customers and society.
  • This ends my presentation.

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