Key Point of President's Regular Press Conference
Key Point of President's Regular Press Conference
July 2012 Regular Press Conference: President Mizuno's Greeting
July 30, 2012
Chubu Electric Power Co.,Inc.
- Today I would like to talk about the following three topics:
- FY2012 First Quarter Financial Results
- Extension of Time for Completing Tsunami Countermeasures at Hamaoka Nuclear Power Station
- Revisions to “Stance on Shareholder Returns” and Dividends Forecasts for the Fiscal Year Ending March 31, 2013
FY2012 First Quarter Financial Results
- First, I’d like to talk about our financial results for the first quarter of FY2012.
- Please see Reference 1, “FY2012 First Quarter Financial Results.”
- Consolidated operating revenues in the electricity business reached 629.5 billion yen, a gain of 90.1 billion yen year on year with the growth of service charges due to such factors as rising electricity sales and an increase in fuel cost adjustments.
- On the other hand, Chubu Electric Power experienced a consolidated ordinary loss of 9.7 billion yen, representing a 29.7 billion yen decline year on year, as the suspension of operations of all reactors at Hamaoka Nuclear Power Station led to a decline in the amount of nuclear power generated, among other factors.
- The consolidated ordinary loss is a first for Chubu Electric Power in the first quarter.
- Next, I will address Chubu Electric Power’s non-consolidated financial
Operating revenues were 593.4 billion yen, up 85.9 billion yen year on year.
There was an operating loss of 3.5 billion yen, a downturn of 22.5 billion yen year on year.
There was an ordinary loss of 9.5 billion yen, a downturn of 28.7 billion yen year on year.
There was a net quarterly loss of 11.7 billion yen, a downturn of 13.0 billion yen year on year.
- The operating loss, ordinary loss and net quarterly loss shown in our non-consolidated financial results are all a first for Chubu Electric Power in the first quarter.
(Outlook for FY2012)
- Next, I would like to address our outlook through the end of the fiscal year.
- While Chubu Electric Power is committed to providing a stable supply of electric power in our own service area, we hope to additionally help other utilities that are facing a supply crunch by supplementing their power. However, the supply and demand situation at other utilities is uncertain and it is impossible to say exactly how much power will need to be provided.
- Aside from being unable to predict such things as how much supplemental power will be required, those utilities also have not stated when they predict they will be able to resume operations at their own nuclear power stations, and thus cannot precisely state their supply capacity.
- So at this time it is difficult to ascertain future supply and demand trends and impossible to give a reasonable forecast of business results under a fixed set of assumptions. Therefore, our FY2012 business results forecast continues to say "Undecided" for operating revenues and income.
- We will make a business results forecast announcement in future as soon as it is possible to do so.
- The challenging cash flow and financial situation of the last fiscal year is expected to continue in FY2012 as operations are suspended at the Hamaoka Nuclear Power Station.
- Chubu Electric Power will deal with the severe challenge by working as a Group on initiatives underway since the last fiscal year to boost management efficiency and by taking thorough cost-cutting measures.
Extension of Time for Completing Tsunami Countermeasures at Hamaoka Nuclear Power Station
- Next, I would like to talk about the extension of time for completing tsunami countermeasures at Hamaoka Nuclear Power Station. Please see Reference 2.
- Chubu Electric Power has made progress toward its December 2012 target for completing certain tsunami countermeasures at Hamaoka Nuclear Power Station as established in July 2011.
- Before I get to the point of this topic, I would like to give a brief overview of the tsunami countermeasures announced in July 2011, specifically, “Flooding prevention measures 1,” “Flooding prevention measures 2” and “Enhancement of emergency measures.”
- “Flooding prevention measures 1” are measures to prevent flooding on the site, and include building a tsunami prevention wall.
- “Flooding prevention measures 2” are measures to prevent tsunami flooding from getting inside buildings and thus to protect equipment that sprays water to cool reactors and spent fuel pools, vents heat, provides a power supply, and so on.
- “Enhancement of emergency measures” refers to a set of measures to ensure that our nuclear reactors can be reliably brought to cold shutdown, even in emergencies, by implementing multiple alternative pieces of equipment to provide cooling.
(About the time extension)
- Now I will talk about the extension of time for completing these measures.
- In light of knowledge learned from incidents such as the Tokyo Electric Power Fukushima Daiichi Nuclear Power Station accidents, Chubu Electric Power revised and strengthened measures to further enhance safety this March.
- In the case of power supply equipment measures under “Enhancement of emergency measures,” the amount of work has increased significantly, leading to problems such as too much work scheduled at one time. Therefore, an extension of about a year has become necessary.
- Here are a few specifics.
- To more reliably secure the cooling function of reactors and spent fuel pools in emergencies, we have decided to ensure multiple cooling equipment that gets electric power from gas turbine generators located on high ground.
- To ensure enough electrical capacity to operate the multiple cooling equipment, we have decided to increase the number of gas turbine generators from the three originally planned to six.
- We have also decided to increase the cables, power panels and so on necessary to go with this.
- While studying detailed plans for site work associated with these revisions, we found that the amount of work had increased significantly, leading to problems such as too much work scheduled at one time, so an extension of about a year was necessary.
(Status of other construction)
- Next, I would like to give an overview of progress on our other tsunami countermeasures.Please see the overall schedule on page 2 of Reference 2.
- “Flooding prevention measures 1” (such as the tsunami prevention wall) and the “Enhance reliability of waterproof doors in outer walls of buildings” part of “Flooding prevention measures 2” are progressing as originally scheduled toward a December completion.
- By the end of the year, our tsunami prevention wall at a height of 18 m will reach 1.6 km in length and waterproof doors in the outer walls of buildings will be doubled and all will be replaced with doors of completely watertight construction.
- “Flooding prevention measures 2” include an emergency seawater intake system (EWS), which will get electric power from gas turbine generators located on high ground. The installation of those generators is one of the measures that are now under an extended time frame. However, we are installing the EWS so that it will be operable with a temporary power source as of March (the end of this fiscal year).
- Therefore, we expect all work on “Flooding prevention measures 1 and 2” to be completed this fiscal year.
(Benefits of tsunami countermeasures)
- Next, I would like to talk about the benefits we will gain by completing all work on “Flooding prevention measures 1 and 2” this fiscal year.
- Our tsunami prevention wall at 18 m in height will prevent flooding from tsunami on the premises, and even if there were a tsunami great enough to overtop the tsunami prevention wall, the tsunami prevention wall would still minimize the amount of flooding and lower the water level on the premises.
- When we have finished doubling waterproof doors in the outer walls of buildings and replacing them with doors of completely watertight construction, our tsunami safety countermeasures will be strengthened.
- Chubu Electric Power’s tsunami countermeasures are designed to account for different levels of tsunami, so that even if some functions are lost under extreme conditions, backup measures will function to provide the necessary performance.
- By taking staged measures like these, the system as a whole will be even more reliable.
- Next, I would like to talk about future initiatives concerning safety measures at Hamaoka Nuclear Power Station.
- The Cabinet Office’s “Nankai Trough Massive Earthquake Model Investigative Commission” released its first report this March on estimates of seismic intensity distribution, tsunami heights, etc., as caused by an anticipated massive earthquake along the Nankai Trough, and is to release results of additional study in late August.
- Chubu Electric Power will confirm the content of the data on these estimates when it is received. We will study the seismic motion and tsunami to be anticipated at Hamaoka Nuclear Power Station and will proceed to evaluate the impact on the station, with a target of completing this by December.
- We are also checking and studying the content of “Technical Knowledge about the Fukushima Daiichi Nuclear Power Station Accidents (Summary)” announced in March 2012 by the Nuclear and Industrial Safety Agency and other Fukushima Daiichi Nuclear Power Station accident study reports announced heretofore.
- We will study the need for further revisions and additions to Hamaoka Nuclear Power Station earthquake and tsunami safety measures, etc., in light of these evaluations and studies.
- Chubu Electric Power will make every effort to give the local community and society in general a sense of security by further enhancing safety at Hamaoka Nuclear Power Station and carefully explaining our measures.
Revisions to “Stance on Shareholder Returns” and Dividends Forecasts for the Fiscal Year Ending March 31, 2013
- Next, I would like to talk about revisions to our “Stance on Shareholder Returns” and dividends forecasts for the fiscal year ending March 31, 2013. Please look at Reference 3, which you have in front of you.
- We project that extending the time about a year for taking tsunami countermeasures at Hamaoka Nuclear Power Station will cause our current challenging financial situation to continue.
- In light of this situation, Chubu Electric Power has determined that it would be difficult to forecast dividends with sufficient accuracy and reasonableness for our shareholders, and therefore we have changed our “Stance on Shareholder Returns” and dividends forecasts for the fiscal year ending March 31, 2013.
- Our basic “Stance on Shareholder Returns” is to seek to provide stable dividends after taking account of financial circumstances and other factors, while continuously investing to ensure the formation and operation of facilities indispensable to providing a safe and stable supply of electric power.
- Additionally, we are changing our dividends forecasts for the fiscal year ending March 31, 2013 from 60 yen per share for the year to “undecided.”
- Chubu Electric Power will continue to take initiatives to further enhance safety at Hamaoka Nuclear Power Station while seeking greater management efficiency as we endeavor to practice stable and sustainable business operations and meet shareholders’ expectations.
- That is all for me today.