The Kansai Electric Power Company, Incorporated

Kansai Electric reported FY2025 consolidated revenue of JPY 4,056.6 billion and recurring profit of JPY 518.5 billion, with both down year over year from FY2024. The FY2025 annual dividend remains JPY 75 per share. For FY2026, management forecasts recurring profit of JPY 290 billion, down JPY 228.5 billion, citing foreign exchange, fuel price fluctuations, lower nuclear capacity factor, inflation, and higher maintenance/construction costs. The company also said FY2025 growth investments totaled about JPY 185 billion versus a prior projection of JPY 300 billion. FY2026 dividend is planned at JPY 80 per share, and the 3-year plan targets more than JPY 270 billion of shareholder returns, JPY 2.5 trillion of cumulative investment, and ROE of over 8% on a 3-year average.

CEO Nozomu Mori framed the next 3 years as a difficult period, repeatedly calling the profit outlook a “plateau” and noting he would have preferred to show higher profits. He said the company is being pressured by lower nuclear capacity factor, higher energy costs and inflation-driven maintenance expenses, but stressed that Kansai Electric will continue investing for safe and stable supply and future growth. Mori also positioned the 2040 vision around becoming a “vital platform for a sustainable society,” expanding beyond electricity into ICT, real estate and other businesses.

CFO Masafumi Kikuoka said FY2025 largely met the financial targets in the prior midterm plan, and detailed the main operating drivers: retail electricity sales volume rose to 116.3 billion kWh, electricity sales to other companies fell by 4.6 billion kWh, nuclear capacity factor declined 4.4 points to 84.1%, Japan CIF crude oil fell by $11.0 per barrel to $71.4, and the exchange rate was JPY 151 to $1, up JPY 2. He explained that Energy segment profit fell by JPY 33.9 billion to JPY 377.3 billion due to lower nuclear utilization and higher other/maintenance costs, partially offset by lower fuel prices. For FY2026, he highlighted the expected JPY 290 billion ordinary profit, with downside risk if Middle East tensions push fuel prices higher, and noted JPY 66 billion of assumed impact from fuel costs in FY2026. He also said the FY2025 growth investment actual was about JPY 185 billion, below the projected JPY 300 billion because projects were reviewed carefully for returns.

Analysts pressed management on why the profit outlook looks so weak despite the long-term growth plan, whether the 8% ROE target is truly a commitment, and how asset recycling and investment timing would work. Mori said the 8% ROE is an “aimed target,” not a guaranteed commitment, and that the company will first try to improve profits while also considering capital measures if needed. On asset recycling, management said timing will be opportunistic rather than fixed, and confirmed at least JPY 380 billion of divestments including Kinden shares. Analysts also asked about pricing responses to inflation and whether electricity charges could be rebalanced; Mori said the company is not planning a simple price-hike approach and will instead focus on cost reduction, value creation and watching industry and regulatory developments.