Key Point of President's Regular Press Conference
Key Point of President's Regular Press Conference
January 2014 Regular Press Conference : President Mizuno's Message
January 31, 2014
Chubu Electric Power Co.,Inc.
- Today I will be discussing the following four matters:
- FY2013 Third-quarter Financial Results
- The Mie-Shiga gas pipeline inaugurate
FY2013 Third-quarter Financial Results
- First of all, I would like to speak about our third-quarter financial results for FY2013.
- Consolidated net sales reached 2.0537 trillion yen, a gain of 93.6 billion yen year on year, owing to such factors as increased service charges due to an increase in fuel cost adjustments.
- In the area of consolidated ordinary profit (loss), factors including increased fuel costs due to the weak yen saw our result decrease by 42.8 billion yen year on year, resulting in a loss of 46.7 billion yen.
- Next, for Chubu Electric's non-consolidated financial statement.
Net sales were 1.9182 trillion yen, up 64.8 billion yen year on year.
Operating income decreased 49.1 billion yen year on year for a loss of 36.6 billion yen.
Ordinary income decreased 47.6 billion yen year on year for a loss of 56.3 billion yen.
Net income for the quarter experienced a loss of 35.2 billion yen, a reduction of 31.4 billion yen year on year.
- Our financial results for the third quarter therefore show an ordinary loss and a net loss for the quarter in both consolidated and non-consolidated results for the third consecutive year.
(Earnings outlook for FY2013)
- Next, for our cash flow outlook for the full year.
- In the area of consolidated net sales, due to factors including sale of power to other utilities, we have revised our previously announced estimate upwards by 40 billion yen, and we now project sales figures of 2.79 trillion yen.
- Turning to consolidated ordinary profit (loss), as a result of factors including an increase in fuel costs due to the weak yen, our previously announced estimate has worsened by 10 billion yen, and we now project a 110 billion yen loss.
- As I have explained, as a result of factors including an increase in fuel costs due to the weak yen, our outlook for income and expenditure has further increased in severity, but we intend to do everything possible throughout the entire company to increase management efficiency.
The Mie-Shiga gas pipeline inaugurate
- Next, I would like to discuss the opening of the Mie-Shiga gas pipeline.
- The natural gas pipeline called “Mie-Shiga gas pipeline,” jointly constructed by Osaka Gas and Chubu Electric, was inaugurated yesterday.
- Since reaching a mutual agreement concerning the construction of the pipeline in September 2004, Osaka Gas and Chubu Electric have been proceeding with construction work and the establishment of facilities in their respective sections of the pipeline.
- The construction work faced a number of difficulties in mountainous areas, and I believe that the fact that we have been able to open the pipeline is entirely due to the perseverance of everyone involved in the project.
- I would like to take this opportunity to thank them all sincerely.
- Allow me to once again discuss the purpose of construction of the Mie-Shiga gas pipeline.
- The pipeline makes it possible for us to receive natural gas from Osaka Gas at the Yokkaichi Thermal Power Station in situations in which we urgently require natural gas for thermal power generation, for example when it is difficult for us to accept LNG at our facilities, or when it is necessary for us to rapidly increase the amount of LNG we use in thermal power generation due to the shutdown of a large-scale power source, for example a coal-fired thermal power station.
- We believe that having a back-up system of this type in place will help to further increase the stability of the power supply.
- At the same time, by connecting the Mie-Shiga gas pipeline to its Shiga gas pipeline, Osaka Gas will be able to receive gas from the Mie Prefecture side, increasing the reliability of the city gas supply.
- This means that the opening of this pipeline will play an extremely important role in increasing the reliability of supply of both power and gas.
- We have pushed ahead with the establishment of LNG infrastructure in Ise Bay, including the following:
- Increasing the number of LNG tanks in the Kawagoe Thermal Power Station
- Enhancing LNG receiving piers in the Kawagoe and Chita sections
- Laying a gas pipeline across Ise Bay
- The Mie-Shiga gas pipeline provides us with a back-up system for the receipt of natural gas from Osaka Gas, further increasing the reliability of our supply of power.
- We also believe that the Mie-Shiga gas pipeline will represent an important infrastructure to us in our sale of gas as a comprehensive energy company.
- Into the future, in addition to ensuring our customers a stable supply of electricity, we aim, through the development of a gas sales business, to become the No. 1 business group in the energy services field.
Repeated improper activities on the part of Group companies
- Finally, I would like to touch on one more subject.
- It is extremely unfortunate that incidents including the recently announced incident of fraudulent claims on the part of Toenec have made it clear that improper activities have been ongoing among Group companies.
- Activities of this type betray not only our customers, but everyone who trusts and supports us. I take such matters extremely seriously, and they are an occasion for sincere reflection.
- We are currently requesting approval for an increase in electricity fees, and we must address serious situations like this as soon as possible.
- We will move quickly to organize discussions between the employees of Group companies and Chubu Electric employees as a new initiative towards enhancing compliance in Group companies.
- In the future as well, we will work to recover as much as possible of the trust that we have lost, through measures including dispatching Chubu Electric personnel to Group companies in order to conduct training in compliance.
- That concludes my remarks for today.