Key Point of President's Regular Press Conference
Key Point of President's Regular Press Conference
January 2018 Regular Press Conference : President Katsuno's Message
January 31, 2018
Chubu Electric Power Co.,Inc.
- Today I will be discussing the following matters:
- FY2017 third quarter financial results
- Commencement of electrified vehicle battery reuse and recycling verification project
- Chubu Electric Power’s executive officers and other matters
FY2017 third quarter financial results
- I first would like to speak about FY2017 third quarter financial results.
- Chubu Electric Power’s consolidated sales for the third quarter of FY2017 recorded 2,062.7 billion yen.
- Increased fuel cost adjustments and greater amounts of surcharge and subsidy pertaining to renewable energy resulted in a 164.0-billion-yen profit increase on a year-on-year basis.
- Consolidated ordinary income marked 116.2 billion yen, a 41.2-billion-yen profit decrease. This was mainly a result of the cut-off error relating to fuel costs and fuel cost adjustments turning into losses.
- Looking at profits excluding cut-off errors, lower electric power sales and higher depreciation charges, among other matters, were factors of deterioration in revenue and expenditure.
- Meanwhile, factors for improved revenue and expenditure included a profit increase achieved by JERA and other affiliates in addition to a total of 16.0-billion-yen cost-saving, which resulted from better fuel cost efficiency and further progress in management streamlining initiatives underway since the beginning of the fiscal year.
- Chubu Electric Power’s profit excluding cut-off errors therefore stood at around 130.0 billion yen: a roughly 5.0 billion yen profit increase year-on-year.
- Turning to non-consolidated financial results,
- sales marked 1,887.8 billion yen. This is a 132.3-billion-yen year-on-year profit increase.
- Ordinary income stood at 97.5 billion yen: a 46.0-billion-yen profit decrease year on year.
- As for the earnings outlook of FY2016,
- the forecasted earnings values announced on October 27 have been corrected to reflect latest performance trends.
- Consolidated sales are expected to record 2,780 billion yen. With greater electric power sales and fuel cost adjustments, a roughly 20.0-billion-yen profit increase is expected from the previous announcement.
- There are factors contributing to improved revenue and expenditure, e.g. higher electric power sales and profit increases achieved by JERA and other affiliates, but the consolidated ordinary income Chubu Electric Power is expecting is 110.0 billion yen. This amount is unchanged from the previously announced figure.
- A 135.0-billion-yen profit excluding cut-off errors is expected, with a total of 25.0-billion-yen cost reduction resulting from better fuel cost efficiency and further progress in management streamlining initiatives.
- Chubu Electric Power will maintain company-wide efforts to streamline its management, and work to meet the expectations and trust of customers, shareholders, and society alike.
Commencement of electrified vehicle battery reuse and recycling verification project
- I now turn to the commencement of the electrified vehicle battery reuse and recycling verification project which Chubu Electric Power is implementing jointly with Toyota Motor Corporation (Toyota).
- Chubu Electric Power and Toyota have today concluded a basic agreement with the aim of commencing verification initiatives, the details of which entail the construction of a large-capacity storage battery system that reuses electrified vehicle batteries, as well as examination of the recycling of used batteries.
- Chubu Electric Power is promoting efforts toward accurate management of fluctuations in energy supply-demand balance caused by large-scale introduction of renewable energy, as well as toward further rationalizing the operation of its electric power system.
- As per "Toyota's Challenge to Promote Widespread Use of Electrified Vehicles" announced in December 2017, Toyota is actively promoting the use of such electrified vehicles as:
- Hybrid electric vehicles
- Plug-in hybrid electric vehicles
- Electric vehicles
- In step with the growing popularity of electrified vehicles, the car manufacturer is also pursuing the effective use of massive amounts of batteries that are to be collected from electrified vehicles, and the development of other social infrastructure that will support the widespread adoption of electrified vehicles.
- Based on the match in the two companies’ initiatives and needs, with the basic agreement the companies will jointly deliberate commercialization efforts aimed at the effective use of electrified vehicle batteries.
- More specifically, the two companies aim to interconnect and reuse batteries collected from Toyota’s electrified vehicles as a large-capacity storage battery system, in turn using that system based on challenges posed by the electric power system.
- When combined in large numbers, used batteries, even with reduced individual performance levels, can be repurposed for energy supply-demand adjustments, frequency fluctuation management, and voltage fluctuation management in distribution systems, all of which accompanying the widespread introduction of renewable energy.
- These effective uses of batteries are expected to serve not only as a solution to challenges within the electric power system, but also expected to contribute to rational thermal power plant operation.
- In FY2018, Chubu Electric Power and Toyota will commence verification of the storage battery system. Based on verification results, the two companies aim to introduce a power generation capacity of approximately 10,000 kW in FY2020.
- Chubu Electric Power and Toyota will also consider establishing a mechanism to select and collect rare-earth metals and other materials from repurposed and reused batteries on a per-raw material basis, in turn re-utilizing the batteries as resources.
- The two companies will contribute to further developing the Chubu region, aiming to achieve both a resource-recycling and low-carbon society through such initiatives as the reuse and recycling of electrified vehicle batteries.
Chubu Electric Power’s executive officers and other matters
- I now turn to Chubu Electric Power’s executive officers and other matters.
- The business environment surrounding Chubu Electric Power will change at an increasingly rapid pace by such factors as the full electric power and gas retail deregulation and progress in the electric power system reform.
- In order for each internal company to address such changes more flexibly and swiftly, Chubu Electric Power has decided to entirely reorganize itself this coming April as previously announced in November 2017. The initiative involves further transferring business functions to internal companies and restructuring Headquarter functions.
- Allow me to introduce the new organization’s executive system decided today. The system will come into effect as of April 1.
- As for Managing Executive Officers,
- Satoshi Onoda will be appointed as Executive Vice President.
- In addition to currently displaying competence in resolving the entire electricity business’s challenges as Senior Managing Director of the Federation of Electric Power Companies of Japan, Onoda has previously been engaged in Chubu Electric Power’s operations as Senior Managing Officer. I am confident that he can bring growth to our businesses.
- Three new Senior Managing Executive Officers and two Managing Executive Officers will be appointed as well.
- Turning to Executive Officers and Division Heads,
- well-experienced personnel who excel in strategy-building, managing skills, and leadership will be assigned to appropriate positions. At the same time, Chubu Electric Power will again not hesitate in appointing young and competent individuals to stimulate the organization.
- Finally, I touch upon retiring Managing Executive Officers and Executive Officers.
- Five Managing Executive Officers and four Executive Officers will retire on March 31. Matsuura, currently Chubu Electric Power’s Director and Executive Vice President, will take over as Director in April.
- Under the new executive system decided today, Chubu Electric Power will continue to accomplish its unwavering mission of providing environmentally-friendly, high-quality, and reasonable energy in a safe and stable manner, and prevail in the competition by offering customers better-than-expected services ahead of other firms. We look forward to your continued support.
- This ends my presentation.