Kansai Electric Power (9503): FY2025 Results Summary — Net Income Falls 9.6% on Lower Nuclear Output

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The Kansai Electric Power Co., Inc. (Kansai Electric Power, 9503) reported consolidated results for FY2025 (fiscal year ended March 31, 2026) with net sales of JPY 4,056.6 bn (down JPY 280.4 bn year on year) and ordinary profit of JPY 518.5 bn (down JPY 13.1 bn). Profit attributable to owners of parent was JPY 380.0 bn, down JPY 40.3 bn (-9.6%) year on year. The Company stated that revenue decreased due to a decrease in electricity sales revenue, while ordinary profit decreased due to a decrease in the nuclear capacity factor and an increase in expenses and maintenance costs in the Energy segment. The FY2025 year-end dividend was set at JPY 45.00 per share, bringing the annual dividend to JPY 75.00 per share.

Consolidated Results (Full-Year Actual)

Consolidated ordinary profit of JPY 518.5 bn exceeded the FY2025 Financial Goal under the Kansai Electric Power Group Medium-term Management Plan (2021-2025, Updated) of ‘more than JPY 360.0 bn.’ Against the plan’s other FY2025 Financial Goals, results were: cumulative FY2021-FY2025 FCF of JPY 628.1 bn (goal: more than JPY 300.0 bn), annual FCF of JPY 80.4 bn (goal: more than JPY 100.0 bn), equity ratio of 35.1% (goal: more than 28%; 36.2% after considering subordinated bonds), ROA of 5.8% (goal: more than 4.4%), ROIC of 5.7% (goal: more than 4.3%), and ROE of 11.7% (goal: approx. 11%).

Item (JPY bn)	FY2024	FY2025	Change	Ratio
Net sales	4,337.1	4,056.6	-280.4	-6.5％
Operating profit	468.8	437.5	-31.3	-6.7％
Ordinary profit	531.6	518.5	-13.1	-2.5％
Profit attributable to owners of parent	420.3	380.0	-40.3	-9.6％

Interest-bearing debt decreased JPY 205.1 bn year on year to JPY 4,266.6 bn as of March 31, 2026, from JPY 4,471.7 bn a year earlier. The equity ratio improved to 35.1% (36.2% after considering subordinated bonds) from 31.8% (32.9%) a year earlier.

Segment Results

By segment (based on the classifications used for FY2025 results, prior to the FY2026 revision described below), the Energy segment’s ordinary profit decreased due to a decrease in electricity sales, a decrease in nuclear capacity factor (Takahama No.1-4 -19.0 bn, Ohi No.3,4 -7.0 bn, partly offset by Mihama No.3 +3.0 bn), and impacts of exchange rates/fuel price fluctuations, including a JPY 84.0 bn decrease in revenue from the fuel cost adjustment system. The T&D segment’s ordinary profit increased mainly on supply and demand adjustment transactions, partly offset by a decrease in revenue from the standard wheeling service and a decrease in electricity demand. The ICT segment’s ordinary profit was roughly flat, as an increase in net sales at OPTAGE Inc. was offset by higher selling and administration costs. The Life/Business Solutions segment’s ordinary profit rose mainly on higher net sales and non-operating income at Kanden Realty & Development Co., Ltd., driven by the Lease, Investment & Development Business, even as lot houses of handover declined to 1,021 units (from 1,504) and the vacancy rate improved to 2.0% (from 2.3%).

Segment (JPY bn)	Net sales (ext.) FY2024	Net sales (ext.) FY2025	Net sales Change	Ordinary profit FY2024	Ordinary profit FY2025	Ordinary profit Change
Energy Segment	3,540.7	3,261.3	-279.3	411.3	377.3	-33.9
T&D Segment	389.1	386.2	-2.8	55.7	63.0	+7.2
ICT Segment	223.5	222.1	-1.3	46.9	47.0	+0.1
Life/Business Solutions Segment	183.6	186.8	+3.2	26.2	39.0	+12.8
Total	4,337.1	4,056.6	-280.4	540.2	526.5	-13.6
Adjustments	－	－	－	-8.5	-8.0	+0.5
Consolidated	4,337.1	4,056.6	-280.4	531.6	518.5	-13.1

FY2026 Forecast

For FY2026 (fiscal year ending March 31, 2027), the Company forecasts consolidated ordinary profit of JPY 290.0 bn (down JPY 228.5 bn year on year) and profit attributable to owners of parent of JPY 310.0 bn (down JPY 70.0 bn). Key planning assumptions (after time lag adjustments) include a nuclear capacity factor of approx. 70% (vs. 84.1% in FY2025), a Japan CIF crude oil price of approx. USD 80/bbl (vs. USD 71.4/bbl), and an exchange rate of approx. JPY 160/USD (vs. JPY 151/USD).

Item (JPY bn)	FY2025 (Results)	FY2026 (Forecast)	Change	Ratio
Net sales	4,056.6	4,500.0	+443.3	+10.9%
Operating profit	437.5	250.0	-187.5	-42.9%
Ordinary profit	518.5	290.0	-228.5	-44.1%
Profit (attributable to owners of parent)	380.0	310.0	-70.0	-18.4%

Following the announcement of ‘Kansai Electric Power Group, Management Plan 2026,’ segment classifications were revised from the FY2026 forecasts onward: the HSDC business, previously classified under the Energy segment, was reclassified into the ICT segment, and the Life/Business Solutions segment was renamed the Real Estate segment, with its business solutions business reclassified into the Energy segment. FY2025 results in the table below are therefore shown as reference values after this simplified reclassification, and differ from the Segment Overview figures shown above, which use the segment classifications prior to the revision.

Segment (JPY bn)	External net sales FY2025 (reclassified)	External net sales FY2026 (Forecast)	Ordinary profit FY2025 (reclassified)	Ordinary profit FY2026 (Forecast)
Energy	3,269.0	3,591.0	380.1	192.0
T&D	386.2	458.0	63.0	31.0
ICT	222.1	219.0	47.0	42.0
Real Estate	179.1	232.0	36.3	33.0
Adjustments	－	－	-8.0	-8.0
Consolidated	4,056.6	4,500.0	518.5	290.0

Shareholder Returns

The FY2025 annual dividend was JPY 75.00 per share (interim JPY 30.00, year-end JPY 45.00). For FY2026, the Company forecasts an annual dividend of JPY 80.00 per share (interim JPY 40.00, year-end JPY 40.00), an increase of JPY 5.00 year on year, based on a comprehensive consideration of financial forecasts and other factors. Per the Financial/Corporate Data appendix, share-buyback amounts were nil in both FY2024 and FY2025. Under measures addressing requests from the Tokyo Stock Exchange, the Company states it has a target consolidated payout ratio of 25-35% as a guide and aims to maintain or increase dividends, alongside pursuing disciplined investment aligned with target ROIC-WACC spreads and unlocking underlying asset value through asset recycling and divestment of shareholdings.

Item	FY2025 (Results)	FY2026 (Forecast)
Annual dividend per share	JPY 75.00	JPY 80.00
Interim dividend per share	JPY 30.00	JPY 40.00
Year-end dividend per share	JPY 45.00	JPY 40.00

Medium-Term Plan / Topics

Under ‘Kansai Electric Power Group, Management Plan 2026,’ the Company’s Financial Goals for the FY2026-FY2028 average are: ROIC of more than 3.3%, ROE of more than 8.0%, Net Debt/EBITDA of approx. 5x, equity ratio in the mid-30% range, EBITDA of more than JPY 800.0 bn, and profit (attributable to owners of parent) of more than JPY 270.0 bn. The Company’s FY2026 outlook (after time lag adjustments) is: ROIC of approx. 3.4% (approx. 3.9%), ROE of approx. 8.7% (approx. 9.7%), Net Debt/EBITDA of approx. 5.2x (approx. 4.9x), equity ratio of approx. 36.9%, EBITDA of approx. JPY 730.0 bn (approx. JPY 781.0 bn), and profit of JPY 310.0 bn (JPY 346.0 bn); the Company notes that these figures may deviate if major factors such as fuel prices or the nuclear capacity factor change drastically, and that the FY26-28 average figures do not reflect changes in the Middle East situation since February 2026.

On growth investment, the Company reported continued investment activity across five domains during FY2025: Generation (including decarbonized power sources), ICT (including HSDC and connectivity data centers), Real Estate (domestic and overseas real estate projects), Overseas Energy (including offshore wind power projects), and Others (domestic and overseas energy management services).

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.