Key Point of President's Regular Press Conference

FY2022 Financial Results and April 2023 Regular Press Conference: President Hayashi’s Message

April 28, 2023
Chubu Electric Power Co.,Inc.

First of all, I would like to talk about the inappropriate handling of customer information.
We take it very seriously that Chubu Electric Power Grid and Chubu Electric Power Miraiz received business improvement recommendations and guidance from the Electricity and Gas Market Surveillance Commission and the Agency for Natural Resources and Energy. Chubu Electric Power Grid and Chubu Electric Power Miraiz will make utmost efforts to enforce recurrence prevention measures as a group by sincerely addressing the business improvement recommendations and guidance and also by confirming and verifying the efforts of the two companies in the “Recurrence Prevention Joint Review Committee” chaired by myself, so that a similar incident will never occur again.

FY2022 Financial Results

（FY2022 Financial Results）

Consolidated net sales for FY2022 totaled 3,986.6 billion yen.
An increase in the fuel cost adjustment as a result of soaring fuel prices among other factors pushed net sales upward by 1,281.5 billion yen year-on-year.
Ordinary income/loss recorded an income of 65.1 billion yen.
Although there was deterioration in revenue and expenditure due to soaring LNG spot prices of JERA, income increased by 124.4 billion yen year-on-year due to decrease in time-lag loss as well as suppression of the impact of market price rise by reviewing the power supply procurement portfolio and development of sales activities based on the procurement cost at Chubu Electric Power Miraiz.
Net income attributable to owners of the parent company amounted to 38.2 billion yen, an increase of 81.2 billion yen from the previous year, mainly due to recording gains on sales of securities as extraordinary gains due to selling a portion of policy holdings, while loss related to the Antimonopoly Act and impairment loss on fixed assets at a subsidiary were recorded as extraordinary loss.

（Business forecast for FY2023）

While fuel prices and wholesale electricity market prices are still fluctuating drastically and remain uncertain, we have made certain assumptions and forecasted financials for FY2023.
Consolidated net sales are expected to be around 3,700 billion yen.
We expect a decrease in sales of about 290 billion yen from the previous year due to decrease in fuel cost adjustment from falling fuel prices.
As for consolidated ordinary income/loss, we expect about 280 billion yen.
We expect income to increase by 215 billion year-on-year due to shift from time-lag loss to profit as well as increase of income of Chubu Electric Power Grid due to revision of consignment charges.
In addition, net sales income/loss attributable to shareholders of the parent company is expected to be approximately 230 billion yen.

（Dividends）

The year-end dividends for FY2022 will be 25 yen per share, the same as the interim dividend, based on our policy of returning profits to shareholders, considering our profit growth and maintaining stable dividends.
Based on the above policy, the annual dividends for FY2023 are expected to be 50 yen per share.

Last April, the Chubu Electric Power Group set a new medium-term management target for FY2025 as the midpoint up to Management Vision 2.0, and formulated a Medium-Term Management Plan that summarizes the initiatives of each business area.
In FY2022, which is the first year of the plan, there were some tough times with deficits expected due to soaring resource prices, but in the end, consolidated ordinary income excluding the time-lag impact recorded around 156 billion yen and ROIC, which is an efficiency indicator, recorded 2.9%.
This is due to efforts to expand thorough management efficiency measures and strengthen our market responsiveness, in addition to the decline in resource prices due to the impact of record warm winter in Europe.
An uncertain business environment is expected to continue, but we will continue to make utmost efforts to achieve the medium-term management target.
Since the Medium-Term Management Plan was formulated, the Chubu Electric Power Group has been working on the initiatives for “energy business area”, “new growth area” and “management area” which supports the aforementioned areas, as a group.
Today, I will introduce the outcome of Chubu Electric Power Group’s initiatives in FY2022 and each of the priority business areas.

（Energy business area）

The Chubu Electric Power Group has responded to the uncertain business environment including resource prices in an agile manner, with JERA implementing fuel trading capturing highly volatile market conditions and with Chubu Electric Power Miraiz reducing the market procurement ratio.
Additionally, Chubu Electric Power Grid has been improving resilience through the use of distributed power sources while reinforcing power transmission and distribution facilities and sophisticating operations for mass introduction of renewable energy.
We will continue to work as a group to deliver safe, affordable and stable energy.
To realize a decarbonated society, we have achieved 23% of the renewable energy expansion target of “3.2GW around 2030”, currently at 740 MW.
We will continue to accelerate in-house developments of wind power generation and geothermal power generation as well as initiatives to be promoted with customers such as off-site PPA services.
At Hamaoka Nuclear Power Station, which takes on an important role in both stable power supply and decarbonization, steady progress is being made toward finalizing the reference seismic motion and reference tsunami. We will continue to sincerely address the review process so that conformity to the New Regulatory Requirements is confirmed as early as possible.

（New growth area）

Regarding global business, in FY2022, we invested in Eavor, a Canadian company that aims to commercialize advanced geothermal technology, and signed a memorandum of understanding with British company bp to explore opportunities for decarbonization in Japan and the wider Asia region. This May, we will start research on the capture, aggregation and transportation of CO2 for realization of CCUS.
We will continue to contribute to realizing a decarbonated society starting with Europe and Asia and work to further increase revenue.
The Chubu Electric Power Group is currently preparing to expand business in the Chubu Area to solve regional problems, in cooperation with Terrarem Group (former Ichikawa Kankyo Holdings) which develops a resource recycling business.
Additionally, we will continue to deliver “new values” to customers and the society by actively participating in medical and healthcare fields.

（Management base）

Lastly, I would like to talk about our initiatives to enhance the “management base” which supports the business areas I introduced.
The driving force to steadily advance the business areas I talked about today is “human resources” which is the corporate value itself.
The Chubu Electric Power Group will improve future values of human resources by providing opportunities to challenge self-transformation to support growth and success of each and every human resource and develop an environment for them to safely and healthily and exercise their abilities to the fullest.
Compliance is also an important management base of our Group. We will continue to make ceaseless efforts to further enforce compliance and improve governance, in addition to continuing conventional activities such as establishing systems for complying with laws and regulations.

（In conclusion）

The Chubu Electric Power Group will steadily work on the initiatives introduced today to achieve the medium-term management target, thereby contributing to the development of a sustainable society with all of our stakeholders.