9511.T

Company Overview and Okinawa Operating Context

• Okinawa Electric Power (Okiden) was founded in 1972 after Okinawa's reversion to Japan, completed consolidation of electric power operations in 1976, and privatized in 1988. The company operates with the corporate slogan 'With the region, for the region' and a mission to contribute to Okinawa's future development through energy supply.
• Okiden supplies power across a vast service area covering around two-thirds of the total land area of Japan (stretching 1,000km east-west and 400km north-south), with power generation facilities on 11 islands including Okinawa's main island, supplying power to all 38 inhabited remote islands via submarine cables.
• Okinawa's power grid is not connected to Japan's main island grid, so Okiden is responsible for 100% of independent power supply in the region, requiring additional reserve generation capacity compared to mainland utilities. Geographic constraints eliminate hydropower, limit large-scale solar development, and make nuclear power unfeasible, leading to a historical reliance on thermal power generation that has been diversified over time.

Current Fuel Mix and Middle East Tensions Impact

• The company's generation mix has evolved from 100% oil-fired power at founding, to addition of coal-fired power (with biomass co-firing starting in the 2000s) and LNG-fired power in the 2010s; oil-fired power now accounts for just 11% of generation.
• Okiden does not import crude oil directly from the Middle East, sourcing all oil from domestic Japanese refineries which hold sufficient reserves, so no risk of fuel supply disruption from current Middle East tensions. Coal is sourced primarily from Indonesia and Australia, and LNG is sourced from Australia, so supply impacts from Middle East tensions are extremely limited.
• While fuel prices have stabilized from the 2022 spike following the Russian invasion of Ukraine (WTI crude currently trades in the $90/bbl range after exceeding $100/bbl in 2022), price changes are reflected in electricity rates with a 3-5 month lag via the fuel cost adjustment system that uses a 3-month moving average, so no immediate electricity rate increase is expected at present.

Core Electric Power Business Operations

• Okiden owns and operates 28 power generation facilities, 129 substations, 1,282km of transmission lines, and 11,400km of distribution lines, all critical infrastructure for Okinawa's economy and daily life. The company prioritizes stable supply and proactive equipment maintenance given Okinawa's harsh operating environment with frequent typhoons.
  • Generation: The company is constructing a new LNG-fired power plant in Makiminato, Urasoe City to replace an over 40-year-old heavy oil-fired facility. The new plant uses cutting-edge high-efficiency generation technology and is designed to allow future conversion to ammonia, a clean fuel.
  • Transmission and Distribution: The company is systematically strengthening transmission and distribution infrastructure to accommodate changing power demand and maintain long-term reliability. It is working to improve typhoon resilience, enable faster outage restoration, and推进 undergrounding of power lines. Additional initiatives include leveraging existing T&D assets for new revenue streams like advertising and parking lot services, and piloting citizen-participatory power pole inspection programs.
  • Retail: Okiden offers value-added services beyond basic power sales to retain customers: the 'ECOnchu Plan' provides 100% effectively renewable, CO2-free power to support sustainable lifestyles, and the 'Okiden Home Safety Partner' service offers one-stop home electrical equipment repair for a fixed monthly fee, which has received strong demand and accumulated approximately 7,000 contracts by the end of February 2026 after launching in October of the previous year.

Group Business Operations

• The Okiden Group operates around a core of comprehensive energy services, with additional businesses in construction/real estate, life/business support, and information and communications:
  • Gas Supply: Okiden supplies LNG to Okinawa Gas for wholesale and to direct commercial customers including factories and hotels. A new 14km gas pipeline connecting the Yoshinoura thermal power station in Nakagusuku Village to Makiminato, Urasoe City has recently been completed, enabling gas supply to existing hotels and commercial properties along the route, and future supply to the entire area if planned base return is completed.
  • Energy Services: Reliance Energy Okinawa, a group subsidiary, provides on-site energy services including owning customer-side equipment and supplying cooling, hot water, and steam. The company expects growing demand from large-scale regional development, base return, and post-base redevelopment projects in Okinawa, and already serves a large base of satisfied customers.
  • Overseas Business: Seed Okinawa, another group subsidiary, leverages Okiden's 40 years of island power system experience to develop projects in other island nations, with 6 ongoing technical assistance and commercial projects in Papua New Guinea, Palau, Samoa and other island regions. In March 2026, the group launched its first overseas power sales business, installing solar panels and storage batteries at a resort hotel in Palau through a newly established local subsidiary, Okiden Pacific Islands Corporation (OPIC).
  • Life & Business Support: Group subsidiary Okiden CplusC offers a privacy-focused elderly monitoring service that uses Wi-Fi sensing technology (no cameras or microphones) to 24/7 track sleep and activity data visible via a mobile app. A pilot program is running across all of Okinawa, with free monitors currently being recruited.

Carbon Neutrality Initiatives

• Okiden has a target to reach net zero CO2 emissions by 2050, with an interim target of 30% emission reduction by 2030 compared to 2005 levels. Okinawa's geographic constraints mean far fewer decarbonization options are available than on the Japanese mainland, making the 30% reduction an ambitious challenge. The strategy is built on two core pillars: increasing the share of renewable energy, and reducing CO2 emissions from thermal power.
  • Renewable Energy Promotion: The 'Kari-roof' service offers free installation, maintenance, and removal of residential rooftop solar panels and storage batteries, allowing customers to achieve home carbon neutrality when combined with all-electric home configurations. The storage batteries provide backup power during typhoon-related outages, and the company aims to make this model the standard for new Okinawa homes. On Hateruma Island, Okiden is piloting a 100% renewable power system using retractable typhoon-resistant wind turbines combined with existing diesel generation, solar, and storage, aiming to achieve 100% renewable power for small remote islands long-term.
  • Thermal Power Decarbonization: Because variable renewable energy (solar and wind) requires thermal generation to balance supply and demand, Okiden is推进 CO2 reduction for thermal generation via increased use of locally-sourced woody biomass, and pilot testing of hydrogen co-firing that produces no CO2 during combustion.

Shareholder Return Policy

• Okiden maintains its long-standing policy of stable continuous dividends, targeting a dividend on equity (DOE) of 2.0% or higher. After the large 2022 deficit significantly weakened the company's financial position, the company set a 3-year recovery period through 2025 to restore financial health, and has already implemented gradual dividend increases. For the current fiscal year, the company plans an interim dividend of 15 yen per share, a final dividend of 15 yen per share, for a full-year dividend of 30 yen per share. Dividend levels after the end of the recovery period will be reviewed based on the company's basic policy.

• For the current fiscal year (final year of the existing mid-term management plan), consolidated ordinary profit is projected at 8 billion yen, which means profits are recovering steadily but remain below the original mid-term plan target of 12 billion yen, so the company is still in a recovery phase.
• Okinawa's nominal prefectural GDP is projected to reach 5.7 trillion yen by 2031, with continued growth in power demand driven by overall economic expansion; inbound tourism has already achieved a V-shaped recovery from the COVID-19 pandemic, with visitor numbers projected to exceed 10 million and hit an all-time high this fiscal year, and over 20 new accommodation facilities scheduled to open from 2026 onward, driving significant further growth in power demand.
• The company is developing a new mid-term management plan covering fiscal 2026 to 2030, which will align Okiden's long-term growth with Okinawa's regional growth strategy, uses a backcasting approach starting from the 2050 long-term vision, and incorporates input from young employees and group company staff. Key priorities include strengthening the core electric power business, driving DX including AI adoption to improve productivity, and deepening understanding of customer needs to remain the preferred energy provider for Okinawa. The new plan will be released to stakeholders as soon as it is finalized.

Full segment-by-segment absolute financial results and revenue contribution percentages are not provided in this transcript. The transcript only confirms that the current fiscal year is the final year of the Okiden Group's mid-term management plan, with a planned consolidated ordinary profit of 8 billion yen, compared to the original mid-term plan target of 12 billion yen. No additional breakdown of financial performance by individual product or business segment is included.

• External market changes since the mid-term management plan was adopted, including rising overall prices, increasing labor costs, ongoing yen depreciation, and rising interest rates, have led to significant increases in fixed costs and fuel procurement costs, which the company identifies as an urgent management priority.
• Okinawa's unique geographic and geographic constraints severely limit the available options for decarbonization compared to mainland Japanese utilities, making it more challenging to hit the 2030 30% emission reduction target and 2050 net zero goal.
• Variable renewable energy (solar and wind) cannot generate power consistently, so thermal power generation remains necessary to balance supply and demand for Okinawa's isolated grid, requiring continued effort to reduce emissions from thermal generation.

No question and answer section is included in the provided transcript excerpt.