Key Point of President's Regular Press Conference

Key Point of President's Regular Press Conference

April 2017 Regular Press Conference : President Katsuno's Message

April 28, 2017
Chubu Electric Power Co.,Inc.

  • Today I will be discussing the following three matters:
    • FY2016 financial results
    • Full electricity and gas retail deregulation
    • Chubu Electric Power’s executive officers and other matters
    • Joint research on cyber security

FY2016 financial results

  • Chubu Electric Power’s consolidated sales for FY2016 recorded 2, 603.5 billion yen.
  • Because of a drop in fuel adjustment cost, lighting power charges declined. This resulted in a 250.5 billion yen decline compared to the previous year.
  • The consolidated ordinary income marked 121.4 billion yen.
  • Following the dropping fuel prices, the different-timing margin of both fuel adjustment and fuel costs shrank. This resulted in a 134.1 billion yen profit decrease compared to the previous year.
  • Turning to non-consolidated financial results, sales stood at 2,389.7 billion yen. This is a 258.6 billion decrease compared to the previous year.
  • Ordinary income marked 99.1 billion yen. This is a 134.5 billion yen profit decrease compared to the previous year.
  • Regarding the earnings outlook for FY2017, consolidated sales are expected to increase to 2,760 billion yen due to increase of lighting power charges resulting from increase in fuel adjustment cost.
  • Consolidated ordinary income is expected to decrease to 100 billion yen due to different-timing margin of fuel adjustment and fuel costs resulting in loss.
  • I now turn to dividends.
  • Chubu Electric Power’s basic stance is to invest in developing and managing equipment that is vital for the safe and stable supply of electric power, while also endeavoring to offer steady dividends on account of financial conditions.
  • On the premise of continuing our all-out efforts toward management efficiency, we made a comprehensive judgment on mid to long-term financial conditions and management environment. We thereby decided on 15 yen per share for the FY2016 year-end dividend.
  • For the FY2017 dividend forecast, we decided on 30 yen per share, which is the same level as FY2016.
  • Chubu Electric Power will continue to streamline management in a company-wide fashion, and will work to cater to the expectation and trust from customers, shareholders, and the society alike.

Full electricity and gas retail deregulation

  • I now turn to “full electricity and gas retail deregulation”.
  • This April marks the 1-year anniversary of start of full electricity retail deregulation, and as full gas retail deregulation will newly start this April, the environment of the energy industry is rapidly changing.
  • In a drastically changing business environment, Chubu Electric Power raises
    1. New service for customers in the Chubu area
    2. Expansion of electricity business in the metropolitan area
    3. Entry into the household gas retail market

    as 3 pillars of the sales strategy, and intends to survive the severe competition by increasing profit through expansion of business area.

  • I now turn to efforts of Chubu Electric Power regarding these 3 pillars of the sales strategy.
  • First, I will talk about the situation of the Chubu area concerning full electricity retail deregulation.
  • We see a response in the Chubu area, as number of applications to the new price menu of Chubu Electric Power has reached 1,150,000 applications before April.
  • This is the result of our efforts of communicating our initiatives to customers through multiple routes such as “KatEne”, “CHUBU DENRYOKU HAJIMERU BU” and direct mails, in addition to providing a price menu that reflects needs of customers and services that are useful to lifestyle and business of customers.
  • On the other hand, since a certain number of customers in the Chubu area has changed their contract to other companies and many customers may decide to change their contract including gas, competition is expected to become more severe.
  • By providing high value-added services that firmly grasps needs of customers, we will make efforts to have customers choose us upon assessing us as a whole with “service” added to “quality” and “price”.
  • Next, I will talk about the situation of the metropolitan area concerning full electricity retail deregulation.
  • Chubu Electric Power which does not have a business foundation in the metropolitan area, which is a market with large market scale and high growth, carries out sales activities by utilizing various routes.
  • In specific,
    • Direct sales by Chubu Electric Power
    • Electricity wholesale sales utilizing Diamond Power
    • Sales in special price plan with partner companies


  • As 100,000 applications which were raised as a “goal to be achieved early on” were reached by April due to achievements of sales activities carried out with all-out efforts of the Chubu Electric Power Group, we see a response also with sales in the metropolitan area.
  • Chubu Electric Power has newly set 200,000 applications as the goal for the metropolitan area. The Tokyo Sales Department which was established this month will take the lead in carrying out sales activities in the metropolitan area and strive to achieve the goal as early as possible.
  • Next, I will talk about initiatives of “selling gas to general households and restaurants”.
  • Chubu Electric Power sees full gas retail deregulation as a good opportunity for developing into a general energy service company that can propose electricity and gas as a whole according to needs of customers.
  • In order to have customers use our gas with a sense of reassurance, it is essential to establish a reliable sales and security system.
  • For gas security, we have a partnership with 4 companies that have a wealth of knowledge and have 300 people stationed at 28 bases to promptly handle requests and concerns of customers according to circumstances.
  • Thanks to this, number of applications to gas menu of Chubu Electric Power has reached 26,000 applications.
  • We have got off to a good start, but it is not easy to accomplish Chubu Electric Power’s goal of “200,000 applications in 5 years”.
  • We will continue to improve the level of security and develop and provide services that satisfy customers so that we can be chosen by customers.
  • Important key in providing services to customers is ICT technology known as the “4th industrial revolution”.
  • IoT which connects various things around you with a network, real-time analysis and utilization of big data or technological innovation of AI is presumed to drastically change the way of business and society. Chubu Electric Power plans to proactively utilize such items for development of services for customers. nbsp;
  • “Technical verification that analyzes electricity usage measured with smart meters with AI” which was announced last week is one example. We would like to utilize results gained through analysis for energy-saving methods that match the lifestyle of customers and service that watches over families living afar.
  • As a company aiming to become a “leading total energy service corporation group”, we will continue to provide services that exceed expectations to customers ahead of other companies.

Chubu Electric Power’s executive officers and other matters

  • I now turn to Chubu Electric Power’s executive officers and other matters.
  • This month, we have transferred to a new executive system for surviving the competition and continuing growth while experiencing full retail deregulation of electric power and gas.
  • I would like to introduce candidate directors decided today who will be asking for approval in the general meeting of shareholders to be held on June 28.
  • For appointment of directors, it was kept in mind to have a structure that allows directors to promptly and appropriately engage in corporate issues and sufficiently demonstrate governance such as appropriate supervision of work execution.
  • Number of directors will continue to be 12 people. 10 people will be reappointed and 2 people will be newly appointed.
  • The 2 new candidate directors have demonstrated to be highly capable of solving issues and executing work and are likely to play a major role in corporate management due to excellent character and insight.
  • Next, I turn to new positions of the 2 directors retiring from their post.
  • Director Sakaguchi will be appointed as an advisor of Chubu Electric Power and Director Ono will be appointed as the President of TOENEC.
  • Under the new management system, we at Chubu Electric Power will maintain our unwavering mission of providing a stable supply of energy, work continuously toward creating new service and value, and accordingly achieve further development. We look forward to your support.

Joint research on cyber security

  • Lastly, I turn to “joint research on cyber security with Hitachi and Keio University”.
  • This research is intended to establish a method of security monitoring system that responds to increasingly sophisticated and advanced cyberattacks through coordination of multiple organizations and to improve security capacity of each organization.
  • Chubu Electric Power has ensured cyber security as a key infrastructure operator. Participation of Chubu Electric Power in research of Keio University and Hitachi would enable efforts to be carried out in demonstration test fields, and contribute to enhancing security measure technologies accordingly.
  • Various types of business support manufacturing in the Chubu area where manufacturing is active. It is also an area where importance of cyber security for protecting companies is extremely important, as companies are connected through ICT.
  • As Chubu Electric Power is connected to customers through the power system, we intend to link achievements of this joint research to initiatives of industry-academia-government cooperation for cyber security by coordinating with customers in the Chubu area.

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