The Kansai Electric Power Company,Incorporated Q4 FY2026 earnings call

CEO Mori mentioned fiscal 2025 consolidated revenue JPY 4,056.6 billion and recurring profit JPY 518.5 billion, both down from FY '24. Fiscal 2026 expected recurring profit JPY 290 billion, decrease due to foreign exchange, fuel prices, nuclear capacity factor, and costs. Plan to pay annual dividend JPY 80 per share in 2026. Group aims to prioritize safety, lead Japan's energy sector, expand into ICT, real estate, new businesses, implement JPY 15 trillion investments by 2040, target ROIC WACC spread 100-150 basis points, revise shareholder return policy with payout ratio 25%-35% and return over JPY 270 billion in next 3 years, aim for ROE over 8% on 3-year average.

Ordinary profit by segment increased year-on-year on all segments except the Energy segment. Profit decreased by JPY 33.9 billion year-on-year to JPY 377.3 billion for Energy segment due to negative impact from decline in nuclear capacity factor and increases in other expenses and maintenance costs despite positive impact of lower fuel prices. Retail electricity sales volume amounted to 116.3 billion kilowatt hour, an increase of 800 million kilowatt hours. Electricity sales volume to other companies decreased by 4.6 billion kilowatt hour. Japan CIF crude oil price decreased by $11.0 per barrel to $71.4 per barrel. Exchange rate was JPY 151 to $1, appreciation of JPY 2.

Fiscal 2026 expected recurring profit JPY 290 billion, decrease of JPY 228.5 billion due to factors like nuclear capacity factor decline, Middle East fuel costs, inflation, maintenance. Plan to pay annual dividend JPY 80 per share in 2026, target consolidated payout ratio 25%-35%, return over JPY 270 billion in next 3 years, aim for ROE over 8% on 3-year average.

Geopolitical risks, inflation, rising interest rates, population decline, Middle East situation impact on fuel costs, uncertainty in nuclear capacity factor improvement, time lag in passing on fuel cost adjustments to accounting numbers.

Q: About profit outlook and dividend, A: Mori and Tanaka discussed challenges and plans.

Q: About investment timing and asset recycle, A: Mori and Tanaka explained investment schedule and asset recycle approach.

Q: About price rebalancing and ROE, A: Mori and Tanaka addressed price rebalancing considerations and ROE target.

Q: About business segment details, A: Mori and Tanaka provided insights into energy segment and other business expansions.