Amid deregulation and
liberalization throughout the
economy as a whole, retail
power sales to high-voltage
users (20 kV or more) were
liberalized in March 2000,
introducing competition into a
market previously dominated
by regional monopolies.
Several foreign energy
companies, and Japanese gas
companies, trading companies
and manufacturers have
already entered the power
market, and bidding for
government and other large
power contracts has become
more competitive.2A Message from the President 3To respond to these challenges, Kyushu Electric Power is committed to several Companywide
management reform measures that will allow us to meet our management objectives more rapidly, give us
more competitive power rates, and improve our quality, service, and entire financial structure. At the same
time, we are ever conscious of our public obligation to ensure stable power supplies, work on global
environmental problems, and maintain universal service and energy security.
To remain competitive in the current climate of liberalization, power companies need to improve their
profitability, strengthen their financial structure and raise their share price. To accomplish these ends, our
Medium-Term Management Guidelines set forth specific management objectives to clarify our management
stance to our customers and stakeholders and outline how to create more rapid management reforms to
achieve this management stance. Our management objectives include improving our shareholder capital ratio,
reducing our interest-bearing debt, and improving our return on assets (ROA) and return on equity (ROE).
To accomplish these management objectives, we will need to maximize our free cash flow to
provide the capital needed for a flexible response. This free cash flow will be used for such applications as (1)
reducing our interest-bearing debt, (2) dividend payouts, (3) lowering power rates and (4) investing in new
business areas.
Our free cash flow for fiscal 2000 (ended March 31, 2001) was 109円.3 billion, the result of rigorous cost
reductions and more efficient capital spending across the board. Fiscal 2000 was the second year in a row in
which we managed to maintain a large free cash flow (above 100円 billion), following last year,s figure of
129円.8 billion.
Operation reforms in fiscal 2001 include our ongoing introduction of information technology (IT) and the
start of an executive officer system. These reforms will speed up management processes and improve our
autonomous operation system.
We are also working on a series of initiatives to improve customer satisfaction. We aim to provide total
energy services that meet a wide range of customer needs. We are improving our services to corporate head
offices, offering consultations to provide the optimum rate options for individual user needs, and analyzing
user feedback to reduce energy costs and environmental impact.
To increase profitability, we are making the most of the facilities, technologies and expertise we have
accumulated through our many years of experience in the power industry, and focusing our management
resources on business areas that best reflect the strengths of the Group. These business areas include total
energy supply (supply of high-quality, low-cost power), information and communication networks
(high-speed, large-capacity fiber optic networks), consumer services (customer relations) and
environmental recycling (constructing a recycling society economic system).
Kyushu Electric Power celebrated its 50th anniversary in May 2001. In the years ahead, we are determined
to continue being the premier energy provider in the Kyushu region and to continue earning the trust of our
customers and stakeholders. Thank you for your support.
Michisada Kamata
President and Chief Executive Officer