Kyushu Electric Power (9508): FY2025 Results Summary — Ordinary Income Up 6.4% on Wheeling Revenue and Lower Fuel Costs

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Kyushu Electric Power reported consolidated sales of 2,247.2 billion of yen for FY2025 (down 4.7% YoY), ordinary income of 207.0 billion of yen (up 6.4% YoY) and net income attributable to owners of the parent of 154.5 billion of yen (up 20.0% YoY). The company states that sales decreased for the first time in two years, while ordinary income and net income increased for the first time in two years. Despite a decline in retail electricity sales volume, profit improved due to an increase in wheeling fee revenue and a decrease in fuel costs resulting from lower power generation costs by changes in the energy mix of the thermal power generation.

Consolidated Results (Full-Year Actual)

Ordinary revenues were 2,289.1 billion of yen, down 107.1 billion of yen (-4.5%) from FY2024, and ordinary expenses were 2,082.0 billion of yen, down 119.5 billion of yen (-5.4%). Operating income was 224.8 billion of yen (up 12.7% YoY). No extraordinary loss was recorded in FY2025, against 13.8 billion of yen in FY2024, which the materials note consisted of an impairment loss of ¥7.7 billion and a loss on business of subsidiaries and associates of ¥6.1 billion.

Item (Billion of Yen)	FY2025	FY2024	Change	%YoY
Ordinary Revenues	2,289.1	2,396.3	-107.1	-4.5
[ Sales : Figures are included above ]	2,247.2	2,356.8	-109.6	-4.7
Ordinary Expenses	2,082.0	2,201.6	-119.5	-5.4
[ Operating Income ]	224.8	199.5	25.2	12.7
Ordinary Income	207.0	194.6	12.3	6.4
Extraordinary Loss	–	13.8	-13.8	–
Net Income attributable to owners of the parent	154.5	128.7	25.7	20.0

On the revenue side, Japanese electric power retail revenues were 1,357.5 billion of yen against 1,466.5 billion of yen a year earlier (-109.0 billion of yen), reflecting a decrease in retail electricity sales volume of -133.5 billion of yen offset by a unit price difference of 24.5 billion of yen, and wholesale revenues were 404.4 billion of yen (-15.1 billion of yen). Wheeling fee revenue (revenue of standard wheeling service) added 23.0 billion of yen. On the expense side, fuel costs fell to 261.7 billion of yen (-78.6 billion of yen) and purchased power from other utilities and other suppliers fell to 540.0 billion of yen (-109.9 billion of yen), while maintenance rose to 185.0 billion of yen and depreciation to 185.2 billion of yen.

Electricity Sales Volume and Power Sources

Consolidated electricity sales volume totaled 98.3 billion kWh (down 2.7% YoY). Retail volume was 68.6 billion kWh (down 9.3% YoY) due to a decrease in contracted power within the Kyushu area, while wholesale volume was 29.6 billion kWh (up 16.9% YoY) mainly due to an increase in transactions of electricity market. The crude oil CIF price was $71/b against $82/b in FY2024, and the exchange rate was ¥151/$ against ¥153/$.

Electricity Sales Volume (Billion kWh)	FY2025	FY2024	Change	% YoY
Retail	68.6	75.6	-7.0	-9.3
Retail: Lighting	24.7	25.6	-0.9	-3.5
Retail: Power	43.9	50.0	-6.1	-12.3
Wholesale	29.6	25.4	4.2	16.9
Total	98.3	101.0	-2.7	-2.7

Generated and received electricity totaled 102.5 billion kWh (down 4.0% YoY). Nuclear generation from own facilities was 28.6 billion kWh (down 7.1% YoY) with a utilization rate of 82.3% against 88.6% in FY2024, thermal was 24.1 billion kWh and hydro 4.7 billion kWh with a water flow rate of 84.6% against 100.8%. On the reference ratio of generated and received electricity, nuclear power accounted for 27.9% (down 1.0 point) and renewable energy for 26.3% (up 1.2 points).

Factors Affecting Consolidated Ordinary Income

The materials bridge ordinary income from 194.6 billion of yen in FY2024 to 207.0 billion of yen in FY2025 (+12.3). Negative factors were the impact of the decrease in retail electricity sales volume (-40.0), the effect of operating nuclear power plants (-18.0) and the effect of the time lag of fuel cost adjustments (-4.0, moving from +12.0 to +8.0). Positive factors were the increase in wheeling fee revenue (+23.0), the effect of a decline in thermal power generation unit prices (+19.0), the impact of the increase in wholesale electricity sales volume (+10.0), other Japanese electric power business items (+13.6) and other items (+8.7). Excluding the effect of the time lag, ordinary income was around 199.0 billion of yen in FY2025 against around 182.6 billion of yen in FY2024. Versus the forecast previously announced in October, the +17.0 billion of yen change comprised -3.0 for the Japanese electric power business and +20.0 for other businesses.

Segment Results

In the Power Generation and Sales Business, sales were 1,842.9 billion of yen (down 8.4% YoY) mainly due to a decrease in retail electricity sales volume, while ordinary income was 136.4 billion of yen (up 19.2% YoY) as a reduction in supply-demand related costs caused by lower fuel prices more than offset the volume decline. The Transmission and Distribution Business posted sales of 720.5 billion of yen (down 3.7% YoY) and ordinary income of 8.2 billion of yen (down 68.8% YoY), reflecting lower electricity demand within the Kyushu area and a decline in the unit price of adjustment grants related to the supply-demand adjustment. The Overseas Business recorded ordinary income of 12.6 billion of yen (up 42.6% YoY), Other Energy Services 36.9 billion of yen (up 11.2% YoY), ICT Services 10.6 billion of yen (up 0.5% YoY) and Urban Development 5.1 billion of yen (up 50.0% YoY). Effective April 1, 2025, the retail electricity business of Kyuden Mirai Energy Co., Inc. was transferred to Kyuden Next Co., Inc., and Kyuden Next was reclassified from Other Energy Services Business to Power Generation and Sales Business, with the previous fiscal year restated.

Segment (Billion of Yen)	Sales FY2025	Sales FY2024	Sales Change	Ordinary Income FY2025	Ordinary Income FY2024	Ordinary Income Change
Power Generation and Sales Business	1,842.9	2,012.5	-169.6	136.4	114.4	21.9
Transmission and Distribution Business	720.5	747.8	-27.2	8.2	26.6	-18.3
Inter-segment transactions eliminated (Japanese Electric Power)	-582.6	-649.1	66.4	–	–	–
Subtotal (Japanese Electric Power)	1,980.8	2,111.3	-130.4	144.7	141.0	3.6
Overseas Business	3.7	4.4	-0.7	12.6	8.8	3.7
Other Energy Services Business	351.7	324.2	27.4	36.9	33.2	3.7
ICT Services Business	152.0	137.8	14.1	10.6	10.5	–
Urban Development Business	27.1	28.5	-1.4	5.1	3.4	1.7
Others	8.8	9.6	-0.7	–	0.5	-0.5
Inter-segment transactions eliminated	-277.2	-259.3	-17.9	-3.0	-3.0	–
Total	2,247.2	2,356.8	-109.6	207.0	194.6	12.3

Financial Position

Assets were ¥5,983.3 billion (an increase of ¥209.3 billion from the end of FY2024), mainly due to an increase in non-current assets resulting from capital investments and an increase in retirement benefit asset. Liabilities were ¥4,757.4 billion (an increase of ¥14.7 billion), with interest-bearing debt of ¥3,697.0 billion included in that figure, down ¥21.7 billion. Equity was ¥1,225.8 billion (an increase of ¥194.5 billion), mainly due to the recording of profit attributable to owners of parent, despite a decrease resulting from the payment of dividends. As a result, the equity ratio increased by 2.6 points to 19.9% compared with the end of FY2024; excluding preferred shares, the ratio was 16.6% against 13.8%.

FY2026 Forecast

For FY2026 the company expects sales of approximately ¥2,300.0 billion, exceeding the level of FY2025, due to an increase in wholesale electricity sales revenue caused by higher wholesale unit prices, despite a decrease in wheeling revenue caused by a decline as a reaction to temperature effects in the previous fiscal year. Ordinary income is expected to be approximately ¥180.0 billion, falling below the level of FY2025, due to the time lag effect of the fuel cost adjustment system turning from a positive impact in the previous fiscal year to a negative impact, despite an increase in sales and an increase in the operation of nuclear power plants. Net income attributable to owners of the parent is expected to be approximately ¥130.0 billion.

Item (Billion of Yen)	FY2026 (Forecast)	FY2025 (Actual)	Change	% YoY
Sales	2,300.0	2,247.2	52.8	2.3
Operating Income	210.0	224.8	-14.8	-6.6
Ordinary Income	180.0	207.0	-27.0	-13.1
Net Income attributable to owners of the parent	130.0	154.5	-24.5	-15.9

The key factors assumed for FY2026 are retail electricity sales volume of 67.1 billion kWh, wholesale volume of 30.4 billion kWh and total volume of 97.5 billion kWh, a crude oil CIF price of $90/b, an exchange rate of ¥160/$, and nuclear transmission-end generation of 29.5 billion kWh with a utilization rate of 84.7%. The ordinary income bridge from FY2025 shows the effect of the time lag of fuel cost adjustments at -21.0 (moving from 8.0 to -13.0), a decrease in electricity demand within the Kyushu area as a reaction to the temperature effect from the previous fiscal year at -12.0, the effect of higher wholesale electricity market prices at +10.0, the effect of operating nuclear power plants at +5.0 and others at -9.0.

Shareholder Returns

For the FY2025 year-end dividend, based on a comprehensive analysis of results for FY2025 and the medium to long-term balance situation, financial and other factors, the company plans to pay ¥25 per common share, and ¥1,450,000 per share for the Class B preferred share. The year-end dividends for FY2025 will be finally decided at the 102nd General Meeting of Stockholders to be held on June 25, 2026. For FY2026, the company plans to pay a dividend of ¥50 per common share (¥25 for both the interim and year-end dividend), and ¥2,900,000 per share for the Class B preferred shares (¥1,450,000 for both the interim and year-end dividend).

Sensitivity to Key Factors

The materials show the estimated effect on FY2026 performance if the key factors fluctuate: a ¥1/$ appreciation of the yen has an impact of around +¥0.6 billion, a $1/b decline in the crude oil CIF price has an impact of around +¥0.3 billion, and each +1% in the nuclear utilization rate has an impact of around +¥2.5 billion.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.