April 28, 2006
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】
FY2005 FY2006 Financial Targets FY2005 FY2006 Financial Targets
Results Forecasts FY2005-2009 Results Forecasts FY2005-2009
FCF 70円.8 Billion 92円.0 Billion Avg. 120円 Billion
Total Energy Business
(Other than Electricity)
5円.0 Billion 4円.5 Billion Avg. 4円 Billion
Ordinary Income 125円.2 Billion 104円.0 Billion Avg. 110円 Billion IT/Telecom Business \-2.3 Billion \-2.5 Billion Avg. 4円 Billion
ROA 2.7% 2.3% Average 3%
Environment/Recycling
& Consumer/Community
2円.5 Billion 3円.5 Billion Avg. 2円 Billion
Shareholders'
Equity Ratio
25.7% 26.7% 30% (End of FY09)
Note: The numbers include incidental businesses of the parent.
【Non-consolidated】
FCF 60円.5 Billion 91円.0 Billion Avg. 100円 Billion
Ordinary Income 114円.1 Billion 95円.0 Billion Avg. 100円 Billion
ROA 2.7% 2.2% Average 3%
Shareholders'
Equity Ratio
25.8% 26.9% 30% (End of FY09)
■しかくElectricity sales volume showed a steady increase in FY2005
*Power Demand by Large Industrial Sector (FY2005)
■しかくLarge industrial demand surpassed the previous year for
27 consecutive months. (As of March 2006)
• Many industries, including chemical and machinery, maintained
robust performance.
■しかくOngoing growth of Kyushu economy
• Large-scale investments are expected to accelerate by major
companies such as automobile companies (Toyota and others) and
Fujitsu Hitachi plasma display.
• Implementing to create new demand by establishing a section
dedicated to attracting enterprises to Kyushu.2* Industrial, 6,000V or above and 500kW or above
- Kyushu Electric Power: +3.4%
- National average: +2.0%*
•Year-on-Year Growth rates in FY2005
* preliminary
・Electrical machinery: Increased production of ICs and electrical parts
・Transportation: Increased production of automobile and removal of private power
generation
・Chemical: Increased production of ethylene and reduced operation of private
power generation
・Nonferrous metal: Increased production of silicon wafers
<Main Factors Contributing to Growth>
Steady Increase in Electricity Sales
Steady Increase in Electricity Sales Volume and Efforts to Create Demand
Volume and Efforts to Create Demand
Main plans for investment in plant and equipment in Kyushu
Period (FY) Company Details
Amount of
investment
(100 mil. yen)
2005- Fujifilm Kyushu
Construction of a new plant for manufacturing LCD
parts
1,000
2005-06 Toyota Mortor Kyushu Construction of an engine manufacturing plant 250-300
2005-06
Sony semiconductor
Kyushu
Expansion of Kagoshima Plant 100
2005-06 Denso
Construction of a new plant for manufacturing diesel
engine fuel injectors2002005-06 Ariake Japan
Construction of Kyushu second plant for
manufacturing high-processing natural seasoning1312005-06
2006-07
Oita Canon Material
Oita Canon
Construction of a new plant for manufacturing toner
cartridges and ink tanks
Construction of a new plant for manufacturing
interchangeable lenses for single-lens reflex cameras800140
2005-07 Nissan Automatization by introducing the latest painting lines 110
2006-07 Kalsonic Kansei Reinforcement of auto parts manufacturing facilities 150
2006-07
Mitsubishi Heavy
Industries
Construction of a new plant for the mass production
of new -type solar cells1002006-08
Fujitsu Hitachi Plasma
Display
Additional construction of a plasma display panel
manufacturing plant
1,000
(Source)Outline of Kyushu Economy 2006 (Kyushu Economic Reserch Center) and companies' HP
(GWh, %)
Electricity volume Y/Y comparison
Electricity 5,710 103.4
Transportation 1,129 106.6
Other 466 110.2
Total 7,305 104.3
2,551 100.3
2,116 110.6
1,180 107.8
1,674 105.0
425 104.8
1,020 109.0
162 87.4
5,760 103.9
22,191 104.6
Machinery
Steel
Chemical
Glass&Ceramics
Other
Total
Foods
Pulp&Paper
Nonferrous Metal
Textiles&Apparels
zElectricity Sold in FY2005: 83.0 Billion kWh
(GWh)
Accumulating Target
total (FY2004-FY2009)
To end consumers 200 260 460 1,300
To commercial/Industrial 190 870 1, 060* 1,200
Total 390 1,130 1, 520 2,500
* includes corporate customers returning from private power generation: 930GWh
FY2004 FY2005
Growth in All-electric housing
■しかくAdditional electricity demand(FY2005):1,130GWh
■しかく To commercial/industrial energy users: 870GWh(FY2005)3Prosperous progress in demand creation
Prosperous progress in demand creation
■しかく To end consumers:260GWh(FY2005)
-Number of All-electric housing acquired
-Application rate of All-electric housing in new construction Demand swifts of private power generation
・Rate reduction in January 2005 in addition to rise in oil
price decreased the advantage of power generation
facilities.
・ Additional rate reduction in April 2006 increased our price
competitiveness.
(Thousand)
FY2004 FY2005
Forecasts
FY2006
Target
FY2009
One fiscal year 49 63 70 -
Accumulating total 219 280 350 500
21 2211332 34146020406080100120140FY03 FY04 FY05020406080100120140160MW
# of customers
(# of customers)(MW)(Forecasts FY2005)
Total (One unit home) (Complex)
21% (45%) (6%)
3.6 5.427.137.317.920.221%18.7%25%‐1020304050607080
FY04 FY05 FY06(Target) 0%5%10%15%20%25%
new‐built one unit home
existing one unit home
complex housing
Penetration rate (new construction)
(×ばつ1,000)70.048.662.94
Total energy business
Total energy business4.5 5.0
Ordinary income
43.0
46.1
Sales to outside
Total energy business
(Consolidated)
FY2006
Forecasts
FY2005
Results
■しかく Financial target of total energy business (Other than electricity)
(Billions of yen)
Financial Target
FY2005-2009
Total energy business
Ordinary income Avg. 4円 Billion
■しかく Overseas Projects
・In Tuxpan No.2 and No.5 projects, We raised our equity
position to 50% BY acquiring 20% share of Mitsubishi
Corporation, which is a joint partner company.
・Revenues from ongoing projects expected about 2円 billion
in around FY2008
■しかく Gas business
・ In FY2005, approximately 190,000 tons of gas and LNG
expect to be sold to the above 7 general gas utilities and
19 major customers through local gas companies and
direct supply.
■しかく Restructuring of NEECO
・ Provide 11.0 billion yen as necessary fund such a cost of
withdrawal from unprofitable matters for NEECO
[The cost of withdrawal: 10.0 billion yen, capital increase:
1.0 billion yen]
・ About 90% of unprofitable matters have been settled for
withdrawal at the end of March 2006.
Expected plant capacity and electricity sales growth of ongoing IPPs (pro rata)
Perspective of Gas Sales Volume0100200300400500600700800FY04 FY05 FY06E FY07E FY08E FY09E050100150200250300Capacity Sales
(Capacity:MW) (Sales:BBJPY)
12.0 18.7 20.7 24.0 26.5 28.90.05.010.015.020.025.030.035.0
FY04 FY05 FY06E FY07E FY08E FY09E
(Unit of sales volume:10,000 tons)
■しかく Financial Target for IT/Telecommunication business
IT/Telecommunication business
IT/Telecommunication business
-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: Increase direct marketing and strengthen sales structure at mass retailers
-The market share in Kyushu area: 25% (as of March 31, 2006)
・Number of BBIQ Accounts*1
(Billions of yen)250FY2007
Target95FY2005
Results48BBIQ
FY2004
Actual
*1 accumulating
-2.5
-2.3
Ordinary income
40.0
36.0
Sales
IT/Telecom
(Consolidated)
FY2006
Forecasts
FY2005
Results
Financial Target
FY2005-2009
IT/Telecommunication business
Ordinary income Avg. 4円 Billion5(Thousand)
Mr. Hiroshi Abe (favorable
personality) used for
advertising for BBIQ
■しかく Financial Target of Environment/Recycling & Consumer/Community
Environment/Recycling & Consumer/Community business
Environment/Recycling & Consumer/Community business
【Consumer/Community business】
(Billions of yen)3.5 2.5
Ordinary income9.0 7.5
Sales
Environment/Recycling &
Consumer/Community
(Consolidated)
FY2006
Forecasts
FY2005
Results
Financial Target
FY2005-2009
Environment/Recycling &
Consumer/Community
Ordinary income Avg. 2円 Billion
【Environment/Recycling business】6- Fluorescent bulb recycling business: J Re-Lights Co., Ltd
・Promote Fluorescent bulb recycling aiming for the first realization of "Lamp to Lamp" in Japan.
・Make a contract with more than two thousand municipalities and enterprises and others in areas of Kyushu,
Chugoku and Shikoku. Volume of contracts and throughput increases steadily year by year.
・Achieve a surplus in FY2005.
- Senior citizens apartment (with nursing care) business: Kyuden Good Life and others
・Start business in 3 areas: Fukuoka (Oct. 2002), Kumamoto (Dec. 2004), Kagoshima (Nov. 2006 [scheduled])
- Housing assessments business: Kyushu Housing Guarantee Inc.
・Cleared an emergency audit for "Affair of falsifying quake resistance for building" by Land, Infrastructure and
Transport Ministry. (In the result of audit, the company was the only investigator with no problem for building
structure calculation in Fukuoka prefecture.)
■しかく Effort in new businesses
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