Hokkaido Electric Power (9509): FY2025 Results Summary — Ordinary Profit of 61.3 Billion Yen Well Above January Guidance

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

Note: Hokkaido Electric Power labels the fiscal year ended March 31, 2026 as “FY2026” and the year ending March 2027 as “FY2027”; this site classifies the most recently completed full year as FY2025 in the title and slug, while all figures, tables and year labels below follow the company’s presentation.

Hokkaido Electric Power Co., Inc. (HEPCO) released its Financial Results for FY2026 on May 12, 2026. Operating revenue fell 46.0 billion yen year on year to 855.9 billion yen, mainly on a decrease in fuel cost adjustments accompanying the decline in fuel prices, and ordinary profit declined 2.7 billion yen to 61.3 billion yen. Profit attributable to owners of parent fell 20.2 billion yen to 43.9 billion yen, reflecting the lower ordinary income plus a decrease in gains on the sale of nuclear fuel that had been recorded as extraordinary income. Even so, ordinary profit came in approximately 18.0 billion yen above the forecast announced in January.

Consolidated Results (Full-Year Actual)

Operating profit was 73.2 billion yen, down 2.5 billion yen (3.4%) year on year. Basic net income per share was 207.40 yen against 305.90 yen a year earlier. On the balance sheet, total assets rose 227.0 billion yen to 2,471.0 billion yen, driven by an increase in fixed assets from investments to respond to rising electricity demand and to achieve carbon neutrality, while the shareholders’ equity ratio improved 1.0 point to 18.5%.

Item (Billion yen)	FY2026 (A)	FY2025 (B)	Change (A)-(B)	Comparison (A)/(B) %
Operating Revenue	855.9	902.0	(46.0)	(5.1)
Operating Profit	73.2	75.8	(2.5)	(3.4)
Ordinary Profit	61.3	64.0	(2.7)	(4.2)
Profit attributable to owners of parent	43.9	64.2	(20.2)	(31.5)
Basic net income per share [Yen]	207.40	305.90	(98.50)	–

Financial status (Billion yen)	As of March 31, 2026 (A)	As of March 31, 2025 (B)	Change (A)-(B)
Assets	2,471.0	2,244.0	227.0
Net Assets	473.6	407.3	66.3
Interest-bearing Debt Outstanding	1,560.0	1,424.8	135.2
Shareholders’ Equity Ratio	18.5%	17.5%	1.0%

Year-on-Year Changes in Ordinary Income

The company bridges ordinary income from 640 (100 million yen) in FY2025 to 613 in FY2026 with the following factors: an impact of a shift in posting of the fuel cost adjustment scheme of +40; an impact by the amount of hydraulic power generation from the previous year of +74; initiatives for the restart of Tomari Nuclear Power Station of -75; increased labor costs, inflation and interest rate hikes of -110; and other factors, including the review of wheeling charges, of +44. Separately, the company shows that income and expenses under the fuel cost adjustment posting shift improved by about 4.0 billion yen year on year, from 2.0 billion yen of income in FY2025 to approximately 6.0 billion yen of income in FY2026.

Against the January forecasts, consolidated ordinary income was up approximately 18.0 billion yen (61.3 billion yen versus approximately 43.0 billion yen). The company attributes this to a reduction in oil-fired thermal power generation, efforts to increase profits while reducing costs, and lower expenses due to delays in the timing of certain expenditures.

Segment Results

Sales in the Hokkaido Electric Power Company segment totaled 735.8 billion yen, a decrease of 52.2 billion yen year on year, chiefly due to a decline in fuel cost adjustments in tandem with a drop in fuel prices; segment ordinary income decreased 9.0 billion yen to 44.6 billion yen on expenses related to the restart of Tomari NPS and increases in labor costs, commodity prices and interest rates. The Hokkaido Electric Power Network segment posted sales of 322.9 billion yen, up 1.7 billion yen, mainly on higher wheeling service tariff revenue following the revision of wheeling service fees and increased area demand during the hot summer, with ordinary income of 2.5 billion yen, up 1.4 billion yen. Other sales amounted to 175.7 billion yen, up 21.7 billion yen, with segment ordinary income of 19.0 billion yen, up 6.8 billion yen, mainly reflecting increased sales in the construction business and continued cost reductions.

Segment (Billion yen)	Metric	FY2026 (A)	FY2025 (B)	Change (A)-(B)
Consolidated total	Operating Revenue	855.9	902.0	(46.0)
Hokkaido Electric Power Company	Operating Revenue	735.8	788.0	(52.2)
Hokkaido Electric Power Network	Operating Revenue	322.9	321.1	1.7
Other	Operating Revenue	175.7	153.9	21.7
Adjustments	Operating Revenue	(378.4)	(361.1)	(17.3)
Consolidated total	Segment Income (Ordinary Income)	61.3	64.0	(2.7)
Hokkaido Electric Power Company	Segment Income (Ordinary Income)	44.6	53.6	(9.0)
Hokkaido Electric Power Network	Segment Income (Ordinary Income)	2.5	1.1	1.4
Other	Segment Income (Ordinary Income)	19.0	12.1	6.8
Adjustments	Segment Income (Ordinary Income)	(4.8)	(2.9)	(1.9)

Electricity Sales

Retail electricity sales volume totaled 22,118 million kWh, a decrease of 3.0% year on year, primarily due to low wholesale electricity market prices and fuel prices as well as a highly competitive business environment. Electricity sales to other utilities totaled 11,981 million kWh, an increase of 11.2% year on year, mainly due to a rise in sales volume owing to an increase in the purchase of renewable energy. On the supply side, the water flow rate was 103.6%, surmounting levels in an average year, while nuclear output remained at zero with all reactors at the Tomari Nuclear Power Station shut down.

Electricity sales (GWh)	FY2026 (A)	FY2025 (B)	Change (A)-(B)	Comparison (A)/(B) %
Residential (low-voltage)	7,719	7,805	(86)	(1.1)
Commercial and Industrial (low-voltage)	1,711	1,764	(53)	(3.0)
High-voltage and Extra high-voltage customers	12,628	13,160	(532)	(4.0)
Retail electricity sales total	22,118	22,800	(682)	(3.0)
Electricity sales to other utility	11,981	10,770	1,211	11.2
Total	34,099	33,570	529	1.6

FY2027 Forecast (Ending March 2027)

The company forecasts operating revenue of approximately 970.0 billion yen, up approximately 114.0 billion yen year on year, chiefly due to an increase in fuel cost adjustments in tandem with a rise in fuel prices, reflecting increases in fuel prices and wholesale electricity market prices given the current situation in the Middle East. Ordinary income is forecast to decrease by 31 billion yen to around 30 billion yen: despite a decrease in expenses related to the restart of Tomari NPS (+70 on the 100 million yen bridge), the impact of time difference under the fuel cost adjustment system changes from gain to loss (-210), while labor costs, commodity prices and interest rates rise (-140) and other factors, including the amount of hydraulic power generation, account for -30. Profit attributable to owners of parent is forecast at around 22.0 billion yen.

Item (Billion yen, billion kWh)	FY2027 Forecasts (A)	FY2026 Results (B)	Change (A)-(B)
Operating Revenue	Approximately 970.0	855.9	Approximately 114.0
Operating profit	Approximately 48.0	73.2	Approximately (25.0)
Ordinary profit	Approximately 30.0	61.3	Approximately (31.0)
Profit attributable to owners of parent	Approximately 22.0	43.9	Approximately (22.0)
Retail electricity sales and electricity sales to other utilities	Approximately 35.8 (Approximately 5.0%)	34.1 (1.6%)	Approximately 1.7
Retail electricity sales	Approximately 21.9 (Approximately (1.0%))	22.1 ((3.0%))	Approximately (0.2)
Foreign exchange rate (JPY per USD)	Approximately 158	151	Approximately 7
CIF crude oil price (USD per barrel)	Approximately 95.0	71.4	Approximately 24.0

Shareholder Returns

The company’s basic dividend policy is to maintain stable returns with a target DOE of 2%. Until the restart of Tomari NPS Unit 3, it will continue to aim for a DOE of 2% while making holistic decisions with due consideration to the recovery of its financial base. At the Board of Directors meeting held on May 12, 2026, HEPCO approved the submission of the FY2026 year-ending dividend to the 102nd General Meeting of Shareholders scheduled for June 25, 2026: 17 yen per share on common shares (total 3,497 million yen) and 1,500,000 yen per share on Class B preferred shares (total 705 million yen). The FY2027 dividend forecast for common stock is 33 yen per share (16.5 yen at both the interim and year-end) based on a DOE of 1.8%, unchanged from the previous year.

Cash Dividend per Share	Common stock – Interim	Common stock – Year-ended	Common stock – Annual total	Class-B preferred – Interim	Class-B preferred – Year-ended	Class-B preferred – Annual total
FY2026 Actual	¥15	¥17	¥32	¥1,500,000	¥1,500,000	¥3,000,000
FY2027 (forecasts)	¥16.5	¥16.5	¥33	¥1,500,000	¥1,500,000	¥3,000,000

Management Targets and the Tomari NPS Restart

The HEPCO Group Management Vision 2035 sets forth a target of consolidated ordinary income of 40 billion yen or more before the restart of Unit 3 of the Tomari Nuclear Power Station; consolidated ordinary income for FY2026 amounted to 61.3 billion yen, and the consolidated capital ratio at the end of FY2026 stood at 18.5%. ROIC was 2.8% and ROE was 10.4% in FY2026, against forecasts of about 1.6% and about 4.8% respectively for FY2027, and targets of 3.0%+ / 8.0%+ for FY2031 and 3.5%+ / 8.0%+ for FY2036. Ordinary income targets are 700 (100 million yen) or more for FY2031 and 900 or more for FY2036, and the capital ratio targets are 20%+ and 25%+ respectively.

Tomari Nuclear Power Station Unit 3 obtained permission for a change in reactor installation license on July 30, 2025. The company is proceeding with design and construction plan approval, security regulations change approval review, pre-use operator inspection, and the construction of seawalls and other safety measures, aiming at the earliest possible restart of Tomari NPS Unit 3 in 2027. Following the restart, it will lower electricity rates by taking full account of cost reductions resulting from the restart and further cost savings from enhanced operational efficiency. In the Hokkaido region, medium- to long-term growth in electricity demand is anticipated as GX projects advance, including the next-generation semiconductor plant by Rapidus Corporation and the large-scale data center by SoftBank Corp. The company also continues work toward the start of operation of Units 2 and 3 of the Ishikariwan Shinko Power Station (planned output: 580,000 kW per unit; scheduled operation start dates: FY2031 for Unit 2, FY2034 for Unit 3).

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.