Key Point of President's Regular Press Conference
Regular Press Conference for January 2011
January 28, 2011
Chubu Electric Power Co.,Inc.
- As we have already announced, we started up Hamaoka Nuclear Power Station Reactor No. 5 on the 25th of this month and today resumed power generation.
- I would like to take this opportunity to offer the residents and all concerned people my sincere thanks for their understanding and support since the Suruga Bay earthquake.
- We will continue to operate the Hamaoka Nuclear Power Station with safety as our highest priority, and put all our efforts into realizing a power station that wins greater public trust.
- Today, I will be discussing three items:
- Chubu Electric's third quarter financial results for FY2010
- Acquisition of treasury stock, and
- Status of renewable energy initiatives
Please note that I previously announced our third quarter financial results and acquisition of treasury stock at the press club of the Nagoya Stock Exchange. For this reason, I will briefly give an overview.
FY2010 Third Quarter Financial Results
(Summary of third quarter financial results)
- First, I will talk about our FY2010 third quarter financial results. Please look at page 1 of Attachment 1, " FY2010 Third Quarter Financial Results."
- Consolidated net sales increased by 78.6 billion yen to 1714.4 billion yen. While there was a decline in retail unit prices in our electricity business,we recorded an increase in service charges resulting from an increase in the volume of power sold.
- Consolidated ordinary income increased by 13.3 billion yen to 169.9 billion yen. There were a variety of factors that impeded cash flow in the electricity business, including lower retail price and rising fuel costs, but we were able to record a profit due to the increased volume of power sold and an increase in nuclear power generation as well as a reduction in repair expenses.
- As a result, our consolidated financial statement indicates an increase in both revenue and profit. The non-consolidated financial statement also shows increased revenue and profit.
(Cash flow outlook for FY2010)
- Next, I would like to discuss the outlook for this fiscal year.
- Please see pages 9 and 10 of Attachment 1.
- As we expect a decline in fuel costs due to the strong yen and other factors,we have revised upwards the forecast results published on October 29, 2010.
- I will discuss the cash flow outlook for FY2010 in comparison with results for FY2009.
- We anticipate that the volume of electric power sold will be 5.4% higher than last year, at 129.5 TWh.
- We forecast that consolidated net sales will rise to about 2,310 billion yen with the growth of service charges due to an increase in electric power sold in the electricity business and other factors.
- On the other hand, while we expect factors such as an increase in the volume of power sold in our electricity business to increase revenue, we forecast that our consolidated ordinary income will decline to about 145 billion yen due to factors including a decline in retail unit prices and an increase in fuel costs.
- As a result, we anticipate that the consolidated financial statements will show increasing revenue and declining profit. We also anticipate that the non-consolidated financial statement will show increasing revenue and declining profit as well.
Acquisition of treasury stock
- Next, I'd like to discuss our acquisition of treasury stock. Please look at References 3 and 4.
- We will maintain the current dividend level as our basic stance and will actively acquire treasury stock with a view toward paying appropriate and timely returns to our shareholders.
- As a result of a comprehensive study of our cash flow and financial situation as well as market trends, we decided at today's meeting of the Board of Directors to acquire treasury stock in the same manner as the previous financial year.
- As the reference indicates, specifics include the following:
- The maximum number of shares to be acquired is 5 million.
- The maximum amount to be paid to acquire the shares will be 12 billion yen.
- The period of acquisition will be February 1, 2011 through March 31, 2011.
- We decided at the same time that all of the newly acquired treasury stock will be retired since the objective of the new acquisition of treasury stock is to enhance shareholder returns.
- In addition, we aim to acquire and retire approximately 20 million shares of treasury stock in the four-year period of FY2011-2014, and continue to ascertain the financial situation and market trends, and conscientiously carry out stock acquisition and retirement.
- Toward this objective, Chubu Electric Power will continue to work for greater management efficiency in order to meet stakeholder expectations.
Status of renewable energy initiatives
- Finally, I would like to discuss Status of renewable energy initiatives.If you could please look at Reference 5.
- Today, we started up commercial operation of both "Mega Solar Iida," which has been under construction in Iida City, Nagano Prefecture, and the Omaezaki Wind Power Station (Phase 2), which has been under construction in Omaezaki City, Shizuoka Prefecture.
- As part of our efforts to protect the environment, since our Group companies are working as one to actively introduce renewable energy, I would like to discuss our Group initiatives.
- For solar power, after establishing a plan to construct Mega Solar Taketoyo in December 2008, we have established development plans to construct Mega Solar Iida and Mega Solar Shimizu. The total of output from these three locations will be 16.5 MW.
- If you could please look at Reference 6.
- We have been constructing Mega Solar Iida since August of last year and started commercial operation today. The station has an output of 1 MW, and the start of operation is forecast to reduce CO2 emissions by about 400 tons annually.Mega Solar Iida is our first commercial solar power station.
- Iida City is our joint partner in this project and uses Mega Solar Iida while taking proactive initiatives to promote and raise awareness of solar power.While operating and maintaining this power station, Chubu Electric Power will use the facility, and verify technical issues and study countermeasures when solar power generation is introduced on a large scale.
- From now on, we will make steady progress on "Mega Solar Taketoyo" (under construction) and "Mega Solar Shimizu" (being planned for Shimizu-ku, Shizuoka City). In addition, we will consider other new mega-solar projects, based on trends in the price of solar panels and the status of our technological studies in mega-solar projects.
- For wind power, Chubu Electric Power and our Group companies, C-Tech Corporation and Aoyama Kogen Wind Farm Co., Ltd., are currently conducting commercial operation at four locations.
- If you could please look at Reference 7.
- We have been constructing Omaezaki Wind Power Station (Phase 2) since July 2009 and started commercial operation today. The station has an output of 16 MW, and the start of operation is forecast to reduce CO2 emissions by about 21,000 tons annually. Omaezaki Wind Power Station (Phase 1) has already commenced commercial operation in February 2010. The entire Omaezaki Wind Power Station has an output of 22 MW, and the operation is forecast to reduce CO2 emissions by about 29,000 tons annually.
- When all wind power stations currently under plan are built, Chubu Electric Group companies as a whole will generate approximately 171 MW of wind power.We believe that this can make a real contribution towards the promotion of more widespread use of wind power, with the ultimate goal of protecting the environment.
- We will further continue to conduct feasibility studies on development locations to expand the use of wind power.
(Hydroelectric and biomass generation)
- Please look at Reference 5 again.
- In addition, Chubu Electric Power commenced commercial operation of "Susado" hydroelectric power station in Azumino City, Nagano Prefecture in September of last year. This small-capacity hydroelectric power station generates power using previously unused head.
- In addition, we have been burning wood biomass fuel together with coal at our Hekinan Thermal Power Station at full scale since last September, and are further planning to burn sewage sludge fuel from April next year.
- Chubu Electric will continue to work actively to develop and introduce solar, wind, and other forms of renewable energy. At the same time, we will proceed with nuclear generation and promote the development of high-efficiency LNG thermal generation, working as a Group to contribute to the realization of a low-carbon society.
- That concludes my remarks for today.