Hokuriku Electric Power Company

Business Details

The company operates power generation using hydroelectric, thermal, and renewable energy sources, along with electricity retail business, primarily in the three Hokuriku prefectures (Toyama, Ishikawa, Fukui) and part of Gifu Prefecture. Lighting and electricity charge revenue is the mainstay, with wholesale sales to other companies via the wholesale electricity exchange and other channels also conducted. Units 1 and 2 of the Shika Nuclear Power Station remain shut down. In FY2026 (ending March 2026), total electricity sales volume increased 3.8% year on year to 33,140 million kWh, but revenue declined due to lower fuel cost adjustment revenue and a decrease in capacity procurement contract amounts.

Recent Overview

Revenue declined year on year due to lower fuel cost adjustment revenue, but ordinary income increased on higher hydroelectric generation and sales volume

In the Power Generation & Sales Business for FY2026 (ending March 2026), total electricity sales volume increased 3.8% year on year (retail up 2.2%, wholesale up 9.0%), but revenue declined to ¥656,298 million (94.2% of the prior period) due to lower fuel cost adjustment revenue and a decrease in capacity procurement contract amounts. On the other hand, an increase in hydroelectric power generation and receipt volume and higher total electricity sales contributed to an increase in ordinary income to ¥66,363 million (108.0% of the prior period). The unplanned shutdown of Unit 2 at the Nanao-Ota Thermal Power Station affected supply. Following the decision to decommission Unit 1 (Mikuni) at the Fukui Thermal Power Station, an extraordinary loss of ¥8,738 million on thermal power station decommissioning was recorded. Electricity and gas rate support subsidies of ¥17,860 million are included in revenue.

Key Products

Growth Drivers

• Expansion of the sales base through an increase in total electricity sales volume (FY2026 (ending March 2026): up 3.8% year on year, with wholesale sales up 9.0% year on year)
• Contribution to ordinary income through utilization of low-cost power sources via increased hydroelectric power generation and receipt volume
• Diversification of revenue through expanded sales to other companies via the wholesale electricity exchange and other channels
• Strengthening of the corporate retail sales base through an increase in contracted electricity
• Future enhancement of supply capacity and decarbonization response through construction of the Toyama Shinko Thermal Power Station LNG Unit 2 and other projects

Risks

• Supply capacity constraints and fixed cost burden due to the continued shutdown of Units 1 and 2 at the Shika Nuclear Power Station
• Impact of the shutdown of Unit 2 at the Nanao-Ota Thermal Power Station (a continuing impact is factored into the forecast for FY2027 (ending March 2027))
• Risk of fluctuation in fuel cost balance due to fuel cost adjustment time lag (a decrease in fuel cost adjustment revenue pressures revenue)
• Impact on earnings from a decrease in capacity procurement contract amounts
• Occurrence of facility outages and restoration costs due to natural disasters such as the 2024 Noto Peninsula Earthquake and the Oku-Noto heavy rainfall
• Risk of fluctuation in fuel prices for coal, LNG, and other fuels, and in exchange rates (FY2027 (ending March 2027) assumptions: crude oil $100/barrel, LNG $700/ton, exchange rate ¥155/dollar)
• Risk of erosion of the retail sales base due to intensifying competition in the electricity market

Business Details

Hokuriku Electric Power Transmission & Distribution Company, Inc. leads the General Transmission & Distribution Business in Toyama, Ishikawa, part of Fukui, and part of Gifu Prefecture. Wheeling revenue is the primary revenue source, with sales also conducted on the wholesale electricity exchange in connection with grid interconnection and purchase of renewable energy sources. As a regulated business responsible for stable electricity supply infrastructure, earnings are affected by trends in area demand volume as well as repair costs and capital expenditure costs.

Recent Overview

Segment profit declined by ¥2,309 million year on year due to an increase in repair costs

In the Transmission & Distribution Business for FY2026 (ending March 2026), revenue was essentially flat, increasing by ¥360 million year on year to ¥221,744 million, driven by increased sales on the wholesale electricity exchange associated with the purchase of renewable energy sources. On the other hand, segment profit (ordinary income basis) declined by ¥2,309 million year on year to ¥19,629 million (89.5% of the prior period) due to an increase in repair costs and other factors. Capital expenditure increased by ¥3,114 million year on year to ¥37,780 million, and depreciation and amortization also increased by ¥1,169 million year on year to ¥25,115 million.

Key Products

Growth Drivers

• Increased sales on the wholesale electricity exchange associated with the expanded grid interconnection of renewable energy sources
• Stable securing of wheeling revenue (the revenue base as a regulated business)
• Improved supply reliability through investment in next-generation transmission and distribution networks
• Expansion of wheeling revenue in line with a recovery in area demand volume

Risks

• Increased expense burden due to an increase in repair costs (materialized as a factor depressing profit in FY2026 (ending March 2026))
• Increase in depreciation and amortization and interest-bearing debt associated with an increase in capital expenditure (¥37,780 million)
• Occurrence of facility restoration costs due to natural disasters such as the 2024 Noto Peninsula Earthquake and the Oku-Noto heavy rainfall
• Increase in grid stabilization costs associated with the mass adoption of renewable energy
• Risk of regulated rate (wheeling fee) revisions and system change risk
• Downward pressure on wheeling revenue due to a decrease in area demand volume

Business Details

The "Others" segment encompasses a diverse range of businesses, including contracted facility maintenance and construction work, manufacturing and sales of materials and equipment, information and communications business, energy, business investment, real estate management, energy solutions, environmental surveys, surveys and design for civil engineering and construction work, and agricultural production. It complements and supports the electricity business of the Hokuriku Electric Power Group while also contributing revenue from customers outside the Group. In FY2026 (ending March 2026), the scope of consolidation contracted due to Hokuriku Electrical Construction Co., Ltd. becoming an equity-method affiliate.

Recent Overview

Revenue and profit declined significantly due to Hokuriku Electrical Construction Co., Ltd. becoming an equity-method affiliate

Due to Hokuriku Electrical Construction Co., Ltd.'s transition from a consolidated subsidiary to an equity-method affiliate in August 2025 and a decrease in contracted construction work orders, revenue to external customers for FY2026 (ending March 2026) declined significantly to ¥71,928 million (down ¥268 million year on year, 82.6% of the prior period), and segment profit fell to ¥3,901 million (down ¥89 million year on year, 30.3% of the prior period). The decrease in cash and cash equivalents associated with the exclusion from consolidation amounted to ¥15,025 million.

Key Products

Growth Drivers

• Expansion of the information and communications business (capturing demand both within and outside the Group)
• Expansion of energy solutions and new business areas (initiatives in line with the Group's medium-term management plan's "expansion of new business areas for sustainable growth")
• Incorporation of equity-method investment income from Hokuriku Electrical Construction Co., Ltd., which became an equity-method affiliate (consolidated equity-method investment income/loss increased significantly to ¥3,659 million in FY2026 (ending March 2026) from ¥982 million in the prior period)
• Expansion of business areas as an integrated Group and strengthening of services for external customers

Risks

• Structural decline in revenue and profit due to the reduced scope of consolidation from Hokuriku Electrical Construction Co., Ltd. becoming an equity-method affiliate (August 2025) (revenue decreased by more than approximately ¥17,000 million year on year)
• Risk of fluctuation in contracted construction work orders (a decrease in orders materialized in FY2026 (ending March 2026))
• Impairment risk related to the unamortized goodwill balance of ¥4,161 million (as of the end of FY2026 (ending March 2026))
• Impact on business activities from natural disasters such as the 2024 Noto Peninsula Earthquake and the Oku-Noto heavy rainfall
• Risk of fluctuation in demand from within the Group due to intensifying competition in the electricity business