November 10, 2005
Business Updates
Statements made in this overview of operations regarding Kyushu Electric Power’s
strategies and forecasts and other statements that are not historical facts are forward-looking
statements based on management’s assumptions and beliefs in light of information currently
available, and should not be interpreted as promises or guarantees.
Owing to various uncertainties, actual results may differ materially from these statements.
Investors are hereby cautioned against making investment decisions solely on the basis of
forward-looking statements contained herein.1Midterm Financial Targets for FY2005
Midterm Financial Targets for FY2005-
-20092009ROA =
NOPAT
Average Total Asset
【Consolidated】【Ordinary Income Targets by Business Area】
FY2004 FY2005NewFinancial Targets
FY2005NewFinancial Targets
Results Forecasts FY2005-2009 Forecasts FY2005-2009
FCF 212円.9 Billion 58円.0 Billion Avg. 120
Total Energy Business
(Other than Electricity)
2円.5 Billion Avg. 4円 Billion
Ordinary Income 159円.9 Billion 106円.0 Billion Avg. 110円 Billion IT/Telecom Business \-3.5 Billion Avg. 4円 Billion
ROA 3.3% 2.4% Average 3%
Environment/Recycling
& Consumer/Community
1円.5 Billion Avg. 2円 Billion
Shareholders'
Equity Ratio
24.2% 25.2% 30% (End of FY09)
Note: The numbers include incidental businesses of the parent.
【Non-consolidated】
FCF 200円.1 Billion 57円.0 Billion Avg. 100円 Billion
Ordinary Income 152円.9 Billion 100円.0 Billion Avg. 100円 Billion
ROA 3.4% 2.4% Average 3%
Shareholders'
Equity Ratio
24.4% 25.4% 30% (End of FY09)
(GWh)
FY2004 FY2005(Interim) Accumulating Target
04/04-03/05 04/05-09/05 total (FY2004-FY2009)
To end consumers 210 110 320 1,300
To commercial/Industrial 190 430 *620 1,200
Total 400 540 940 2,500
* includes corporate customers returning from private power generation: 530GWh
Growth in All-electric housing
■しかくAdditional electricity demand(04/05-09/05):540GWh
【To commercial/industrial energy users: 430GWh(04/05-09/05)】2Prosperous progress in demand creation
Prosperous progress in demand creation
Mrs. Chisato Moritaka
(favorable personality)
used for advertising All-
electric housing
-Corporate customers returning from private power generation
New logo for All-electric
housing
【To end consumers: 110GWh(04/05-09/05)】
-Number of All-electric housing acquired
Total (New construction) (Refurbishment)
27,448 (10,978) (16,470)
-Application rate of All-electric housing in new construction
Total (One unit home) (Complex)
18.5% (40.5%) (3.5%)
FY2003
04/03-03/04
FY2004
04/04-03/05
FY2005(Interim)
04/05-09/05
Number of cases 32 34 75
Capacity 21MW 21MW 62MW18.127.115.721.5
32.022.015.4%
18.7%‐10203040506070
FY2003 FY2004 FY2005(Target) 5%7%9%11%13%15%17%19%
# of new construction
# of refurbishment
Penetration rate in new
construction
(×ばつ1,000)54.048.633.83
Total energy business
Total energy business
2.5 ( - )
0.4 (-4.2)
Ordinary
income
118.0 (53.8)
123.2 (50.5)
Sales
Total energy business
(Consolidated)
FY2005
Forecast (Interim*)
FY2004
Results (Interim)
■しかく Financial target of total energy business (Other than electricity)
■しかく Strategy of total energy business
【Gas business】
-Expand gas and LNG sales by relationship with local gas companies
-Promote gas business as total solutions to meet various customer’s needs
【Overseas projects】
-Expand profit-earning opportunities for company-wide operations utilizing our business
know-how acquired in the electricity business.
【Distributed generation business/Heat storage business】
-Promote as total solutions to meet various customer’s needs
【Others】
-Make efforts in new energy generation business for environmental conservation
(Billions of yen)
Focus on the total energy business as a business to utilize our management resources
cultivated in the electricity business
Focus on the total energy business as a business to utilize our management resources
cultivated in the electricity business
Financial Target
FY2005-2009
Total energy business
Ordinary income Avg. 4円 Billion
*actual4■しかく Perspective
Outline of the restructuring
Restructuring of NEECO
Restructuring of NEECO
■しかく Nishinippon Environmental Energy Company (NEECO:Subsidiary company of Kyushu Electric Power)
-NEECO is engaged in heat supply business, distributed generation business and energy consulting business, etc.
-However, the achievement of distributed generation business has been worsened due to soaring fuel prices from 2004.
■しかく Restructuring of NEECO
-Provide 12.2* billions of yen as necessary fund such a cost of withdrawal from unprofitable matters for NEECO
[The cost of withdrawal: 11.2 billions of yen, capital increase: 1.0 billions of yen]
About 60% of unprofitable matters have been settled for withdrawal at the end of September.
【NEECO】 -Focus on Gas co-generation in the distributed generation business
-Work around to a new business in biomass energy generation as well as promote the energy consulting
【Fukuoka Energy Service】 -Pursue management efficiency by severely cutting operating expenses in the heat
storage business
*13.3 billions of yen as of the previous announcement in 09/14/05
-Make NEECO of a wholly owned subsidiary of Kyushu Electric Power
-Establish a new company (Fukuoka Energy Service) separating the heat supply business from NEECO
NEECO NEECO
Distributed generation Distributed generation
Energy consulting, etc. Energy consulting, etc.
Capital 0.01 billions of yen Capital increase 1.0 billions of yen Capital 1.01 billions of yen
NEECO 12/1/05 Investment ratio* 80:20→100:0 Monetary support 11.2 billions of yen Investment ratio* 100:0
Distributed generation (to be scheduled) *Kyushu Electric:Saibu Gas *Kyushu Electric:Saibu Gas
Energy consulting
Heat supply, etc.
Capital 4.1billions of yen
Investment ratio* 80:20 Fukuoka Energy Service Fukuoka Energy Service
*Kyushu Electric:Saibu Gas Heat supply Heat supply
Capital 0.01 billions of yen Capital increase Capital undecided
Investment ratio* 80:20 (to be scheduled) Investment ratio undecided
*Kyushu Electric:Saibu Gas
IT/Telecommunication business
Ordinary income Avg. 4円 Billion5■しかく Financial Target for IT/Telecommunication business
IT/Telecommunication business
IT/Telecommunication business
Financial Target
FY2005-2009
-Broadband service (BBIQ・IP telephone): Pursue growth as core business in IT/T business [QTNet]
-Leased line service and VLAN: Pursue management efficiency by severely cutting operation expenses [QTNet]
-IT consulting and Data center business: Expect growth in profit with value-added service [QIC]
-Communication and control systems: Concentrate on larger margin areas and cost cutting [Nishimu]
-Data network business: Expand external sales and improve profitability [QBS]
【Strategic overview [company]】
■しかく Broadband service
-BBIQ: Introduce value-added multimedia services such as e-learning and video-on-demand
-IP telephone service: Started from April 2005
-Increase direct marketing and strengthen sales structure at mass retailers
・Number of BBIQ Accounts*1 (Thousand)
4.5 ( 1.7)
2.4 ( 1.0)
Sales
BBIQ・IP telephone
FY2005
Forecast(interim*)
FY2004
Actual(interim)
(Billions of yen)
-3.5 ( -2.5)
-2.4 ( -2.4)
Ordinary
income/loss
71.0 (31.4)
69.2 (29.1)
Sales
IT/Telecom
(Consolidated)
FY2005
Forecast(interim*)
FY2004
Actual(interim)
(Billions of yen)
*actual
*actual250FY2007
Target(67)FY2005
(Interim*2)48BBIQ
FY2004
Actual
*1 accumulating *2 actual
For more information, please contact:
Investor Relations Group
Corporate Planning Office
KYUSHU ELECTRIC POWER CO., INC.
Telephone: +81 92 761 3031 (Operator)
Facsimile: +81 92 733 1435
URL: http://www.kyuden.co.jp/en_ir_index