Key Point of President's Regular Press Conference
Key Point of President's Regular Press Conference
April 2018 Regular Press Conference : President Katsuno's Message
April 27, 2018
Chubu Electric Power Co.,Inc.
- Today I will be discussing the following matters:
- FY2017 financial results
- Chubu Electric Power’s executive officers and other matters
- Business launch of Necolico, a new company
- Sales activity initiatives
FY2017 financial results
- I first would like to talk about FY2017 financial results.
- Consolidated sales for FY2017 posted 2,853.3 billion JPY. Increased fuel cost adjustment and greater amount of charges and subsidies pertaining to renewable energy resulted in a profit increase of 249.7 billion JPY year-on-year.
- Consolidated ordinary income was 128.5 billion JPY.
- Let us look at key factors contributing to the increases and decreases in our results. The accrued income incurred by the fuel cost adjustment system posted a loss, causing our status of revenue for expenditures to deteriorate by 25 billion JPY.
- Meanwhile, other contributing factors are increases in JERA and other affiliated companies’ profits in addition to a 25 billion JPY-worth progress in Chubu Electric Power’s management streamlining efforts that have been underway since the fiscal year started. As a result, our balance on revenue improved by 32 billion JPY.
- We therefore posted a 7 billion JPY profit increase.
- Our profit, excluding the impact of accrued income and loss incurred by the fuel cost adjustment system, reached around 147 billion JPY, increasing roughly 32 billion JPY.
- Now I turn to the earnings outlook for FY2018.
- Despite a drop in electric power sales, consolidated sales are expected to increase to 2,950.0 billion JPY due to higher fuel adjustment costs.
- By making every effort across the Group, including undertakings to streamline fuel costs and base costs, consolidated ordinary income is expected to increase to 135 billion JPY in spite of lower electric power sales.
- Our income, excluding the impact of accrued income and loss incurred by the fuel cost adjustment system, is expected to reach our 150 billion JPY management goal.
- Let us now look at dividends.
- We are planning on 20 JPY per share for the FY2017 year-end dividend, comprehensively considering such factors as mid- to long-term financial conditions and business environments, in addition to improvements in revenue and expenditure brought on by progress in continual management streamlining efforts.
- We are planning an annual 40 JPY per share for the FY2018 dividend forecast; a level in which the year-end dividend from FY2017 is maintained.
- We will continue to promote our group-wide management streamlining efforts, endeavor to expand revenue, and take steps to meet expectations and trust of customers, shareholders, and society.
Chubu Electric Power’s executive officers and other matters
- Next, I would like to talk about Chubu Electric Power’s executive officers and other matters.
- Chubu Electric Power has transitioned into a new executive system on April 1. I would like to brief on the candidates of Executive Officers decided today, for whom approval will be sought at the general meeting of shareholders scheduled for June 27.
- We aimed to arrange a new lineup of Executive Officers that can swiftly and accurately address management challenges and thoroughly demonstrate governance by, for instance, properly supervising the administration of corporate affairs.
- The number of Executive Officers will remain unchanged at 12, out of which nine are to be reappointed and three newly assigned.
- All three of the new Executive Officer candidates have adequate capability for managing Chubu Electric Power: they have thus far performed at high levels in resolving challenges and administrating corporate affairs as officers of our company. An informal decision has been made to appoint Mr. Onoda as Representative Director.
- Under the new executive system, we will maintain our unwavering mission of providing energy stably and also keep trying our hand at developing new value on account of changes of the times to achieve further development.
Business launch of Necolico, a new company
- Next, I would like to talk about a new company we launched as an energy service alliance.
- This February, Internet Initiative Japan Inc. and Chubu Electric Power have announced their plans to jointly establish a new company. That firm today started its operations under the name Necolico.
- Necolico offers a platform for operators involved in Internet of Things (IoT) services. Plans are underway for the new firm to launch a service called “necolico HOME+” starting this September.
- Harnessing the latest IoT technology to collect various living-related data including indoor temperatures and humidity levels or electricity use in customers’ homes, “necolico HOME+” is a platform that enables customers, even when they are not at home, to operate electric home appliances or view data in real-time using the communication app “LINE.”
- With “necolico HOME+,” operators planning on providing new services can swiftly launch their operation without having to build a platform on their own.
- Using Necolico’s new service, Chubu Electric Power will also offer services that bring convenience and comfort to customers’ lives.
Sales activity initiatives
- Next, I would like to talk about our sales activity initiatives.
- The competition in electricity and gas services, among other energy sources, has been accelerating ever since the liberalization of the retail power market, and is expected to further intensify down the road.
- In order for us to remain a top-choice utility for customers amid such circumstances of the retail power market, Chubu Electric Power has been engaging in its operations by establishing three strategic pillars:
- New services for customers in the Chubu area
- Business expansion in the Tokyo metropolitan area
- Gas sales for household use
We are further reinforcing these three pillars by continuing to position them as key challenges for our sales strategy.
- Customers in the Chubu area are the foundation of our business. We will expand our service for these people by coordinating with companies from various industries. At the same time, by setting new targets, we will work on marketing electricity particularly in the Tokyo metropolitan area and on selling gas.
- I first would like to look at household gas sales.
- In the previous fiscal year, which marked the beginning of the full liberalization in gas retail, we succeeded in securing 100 thousand contracts: our target for the first fiscal year. As of April 19, we have gained around 117 thousand contracts.
- The benefit of our comprehensive service bundling gas and electricity has proved to be popular among customers for its cost-effectiveness and advantage of combining electricity and heating bill payments. Starting this February, we have reinforced the number of our gas sales personnel to some 110 from around 30 and have been rolling out face-to-face sales briefing activities for customers.
- In addition, we will push forward our previous target by three years, aiming to secure 200 thousand contracts by the end of this fiscal year. This will be achieved by further diversifying various sales channels through such efforts as sales coordination with KDDI, the announcement of which we made today.
- Next, I’d like to talk about sales of electricity in the Tokyo metropolitan area.
- With regard to sales of electricity in the greater Tokyo area, roughly 210 thousand customers have signed contracts with us as of April 11, meaning we have managed to achieve our immediate target of securing 200 thousand contracts in roughly two years.
- This outcome likely is a result of our rolling out businesses through various channels. Examples include dedicated plans with partner companies and electricity wholesale by Diamond Power, in addition to the direct marketing steps particularly taken by the Tokyo Sales Department in the Tokyo metropolitan area, where our business base is underdeveloped.
- This month saw the establishment of CD Energy Direct. Bringing together the managerial resources and know-how of Osaka Gas and Chubu Electric Power has allowed for enhancing the range and value of services available to customers.
- The Tokyo metropolitan area is an appealing market in terms of size and potential for high growth. We will look to further expand business in that area.
- Regarding electricity sales in the greater Tokyo area, we have accordingly decided to set a new target aiming for the entire Group, including CD Energy Direct, to secure 300 thousand contracts by the end of this fiscal year.
- Before ending my presentation, I wish to talk about electricity sales in the Kansai area.
- Catering to requests from corporate customers who have contracts with us in the Chubu region: Chubu Electric Power has already started marketing electricity in the Kansai area.
- Harnessing knowledge gained from our sales activities in the greater Tokyo area: we will boost coordination with partner companies and beef up our sales system by such efforts as assigning Kansai area sales personnel from this April, thereby taking more active steps to expand business in Kansai.
- The competitive environment surrounding Chubu Electric Power is growing intense. But to serve as a top-choice utility, not only for customers in Chubu but also in Tokyo metropolitan and Kansai areas, we will offer services with high added value that meet customer needs to win recognition collectively for our prices and services, and outperform competitors accordingly.