Key Point of President's Regular Press Conference

Key Point of President's Regular Press Conference

October 2020 Regular Press Conference : President Hayashi's Message

October 30, 2020
Chubu Electric Power Co.,Inc.

  • I will be discussing the following matters today:
  • Financial results for Q2 2020

Financial results for Q2 2020

  • In the second quarter of FY2020, Chubu Electric Power recorded operating revenues totaling 1,451.9 billion yen, which represents a revenue decline of 120.4 billion yen or 7.7% year-on-year mainly due to COVID-19 driving electric energy sales down by 85.2 billion yen and a decrease in the fuel cost adjustment charge by 50.2 billion yen.
  • Our ordinary income for the quarter was 146.4 billion yen. This represents an income increase of 2.8 billion yen year-on-year due to increase in time lag income of around 24 billion yen and efforts to reduce power procurement costs, although there were profit declines due to COVID-19 driving electric sales down by around 26 billion yen and JERA recording all the gain from divestiture of overseas power generation projects in the previous year. In other words, sales decreased while profits increased.
  • Since it is difficult to pinpoint the impact of COVID-19, the drop in electricity demand, less the decline attributable to other factors such as temperatures and market competition, is assumed to be the impact of the novel coronavirus. Consolidated ordinary income excluding the effect of time lag stands at 90 billion yen, a decrease of around 22 billion yen year-on-year compared to 112 billion yen in the previous year.
  • Next is the interim dividend of the current period. The interim dividend of the current period was 25 yen per share.
  • Now, let me talk about our business forecast for FY2020. Actual electricity demand in the Chubu region hit bottom in May with a year-on-year drop of 12.9%, and has headed for recovery since June mainly due to industrial demand.
  • Although coronavirus-induced changes in social structures have cast a shadow of uncertainty over future economic outlook, we expect actual electricity demand in the Chubu region to continue its recovery in the second half of the year as a whole based on the Q2 results and information from our customers, and the previously reported year-on-year forecasted drop of 6% has been revised upwards to 2%.
  • Based on the premises, our consolidated operating revenues are forecast to increase by about 50 billion yen from the previous announcement to 2.8 trillion yen, due to an increase in electric energy sales.
  • Consolidated ordinary income is forecast to be 145 billion yen, up 20 billion yen from the previous announcement.
  • In more detail, despite a reduction in time lag income of about 15 billion yen, we anticipate an increase of about 20 billion yen due to increased area electricity demand centered on industrial use resulting from reduced COVID-19 impact, an increase of about 7 billion yen from increased electric energy sales due to warmer summer weather, and an increase of about 8 billion yen due to streamlining efforts.
  • We forecast the income of around 110 billion yen, which does not include time lag gain. This is an increase of around 35 billion yen from the previous announcement and a decrease in income of around 43 billion (-28%) compared to the previous year.
  • Although the impact of the novel coronavirus is still unclear and we continue to face tough marketing competition, the Chubu Electric Power Group shall strive to transform its business model to achieve “new value creation” by further accelerating our initiatives in light of changes in social structures. We will maximize values we provide to daily life and business, in addition to the energy we provide, for our customers and the society, and continue to make efforts to boost our business income.
  • This ends my presentation.

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