Shikoku Electric Power Company, Incorporated
9507・Prime Market・Electric Power & Gas
Business
The Shikoku Electric Power Group consists of 65 companies in total, centered on Shikoku Electric Power Co., Inc., including 12 consolidated subsidiaries and 29 affiliated companies. In addition to its core electricity business (power generation, sales, and transmission & distribution), the group operates Information & Communications, covering fiber-optic communication and data centers, an Energy Business including LNG Sales, a Construction & Engineering Business, and Manufacturing, Trading, Real Estate, and R&D businesses. While its main customer base consists of household and corporate customers in the Shikoku area, the group is expanding its business scope beyond the area through Wholesale Sales and international operations. Consolidated net sales for FY2025 were ¥761,862 million.
Business Model
The Power Generation & Sales Business (net sales of ¥630,128 million) and the Transmission & Distribution Business (net sales of ¥230,529 million) form the core of earnings. The Transmission & Distribution Business secures stable earnings under revenue cap regulation, while the Power Generation & Sales Business earns income through both retail and wholesale sales. The Information & Communications business (net sales of ¥52,751 million, operating margin of approximately 21%) and the Energy Business contribute to earnings diversification as growth businesses.
Company Strengths
Ikata Power Station Unit 3 operated at a capacity factor of 81% in FY2025, supplying 6,042 million kWh of nuclear power generation. Nuclear power has relatively low fuel costs and low CO₂ emissions. A capacity factor of 91% is planned for FY2026, and the stable operation of this low-cost power source underpins the earnings base of the Power Generation & Sales Business.
Information & Communications achieved net sales of ¥52,751 million and ordinary income of ¥11,289 million (a profit margin of approximately 21%) in FY2025, continuing to post increased revenue and profit year on year. This has been driven by growth in the number of subscribers to Fiber-Optic Communication Service for Individuals (Pikara) and the expansion of Data Center Service contracts, and it functions as the group's highest-margin growth segment.
The equity ratio, which had fallen to 18.3% at the end of FY2022, recovered to 27.4% at the end of FY2025, achieving the target (25% or higher) set in the Medium-Term Management Plan 2025. The interest-bearing debt ratio also improved from 3.2x at the end of FY2022 to 2.0x at the end of FY2025. Equity capital has built up to ¥474.5 billion (equivalent to ¥474,500 million), strengthening the financial base.
ENVALITH's Perspective
Performance Trend
Consolidated net sales for FY2026 (ending March 2026) were ¥761,862 million (down 10.5% year on year), operating income was ¥67,848 million (down 23.8%), and net income attributable to owners of parent was ¥50,809 million (down 25.6%), marking a shift from two consecutive years of profit growth to a decline. The main external factors behind the decrease in revenue were a decline in the fuel cost adjustment (retail sales revenue down ¥29.4 billion) and a decrease in capacity procurement contract amounts (wholesale sales revenue down ¥56.0 billion). On the cost side, amortization of actuarial differences related to retirement benefits (+¥10.9 billion) pushed down personnel expenses, and supply-demand-related costs decreased significantly by ¥80.0 billion due to lower thermal power unit costs and other factors, but these were partially offset by an increase in repair costs (+¥7.0 billion) and higher nuclear back-end costs (+¥1.6 billion). Looking at the trend over the past five fiscal years, the company posted losses for two consecutive years in FY2022 and FY2023, followed by a sharp recovery in FY2024 and FY2025, and now an adjustment phase in FY2026. The forecast for FY2027 (ending March 2027) anticipates a further decline in profit, with net income attributable to owners of parent projected at ¥30,000 million.
Growth Strategy
A two-pronged strategy of strengthening profitability in the Electric Utility Business and expanding growth businesses centered on Information & Communications and the Energy Business
Placing top priority on the safe and stable operation of Ikata Power Station Unit 3, the company aims to improve equipment utilization. It plans to raise the nuclear utilization rate from the FY2025 actual of 81% to a FY2026 forecast of 91%. While steadily processing back-end costs such as amortization of provisional accounts related to nuclear decommissioning (¥5,211 million per year), the company aims to maintain its competitive advantage as a low-cost power source.
The company plans a significant increase in Wholesale Sales electricity volume, from 11.5 billion kWh in FY2025 to a forecast of 16.8 billion kWh in FY2026. By utilizing schemes such as the capacity market and the Supply-Demand Adjustment Service market, and by expanding bilateral sales, the company aims to build a revenue source that is not dependent on retail sales. This strategy carries an inherent risk that earnings will be affected by external factors such as electricity market price trends.
The company is promoting expansion of subscribers to its Fiber-Optic Communication Service for Individuals and strengthening its data center business. In FY2025, segment profit in Information & Communications was ¥11,289 million, maintaining the highest profitability level among all segments. Riding the tailwind of external factors such as expanding data communication demand driven by the spread of generative AI and new/expanded semiconductor plant construction, the company continues to make active capital investments (increase in tangible and intangible fixed assets of ¥5,222 million).
The company added PT Hero Global Investment Tbk and Luluah SKY Energy Holding Ltd as equity-method affiliates, expanding investment in overseas energy businesses. Investment in equity-method affiliates increased to ¥99,787 million (from ¥91,195 million in the previous fiscal year). The company aims to capture demand for decarbonization and energy solutions, promoting diversification of group revenue.
Stable dividend payments are the company's basic policy for shareholder returns, with a dividend on equity ratio of 2.5% set as a target under the Medium-Term Management Plan 2030. The company plans to continue raising dividends, from an annual dividend of ¥50 (payout ratio 20.2%) in FY2025 to a forecast of ¥55 in FY2026. The company maintains its dividend increase policy even during a phase of declining earnings, demonstrating a management stance that emphasizes stability in shareholder returns.
Last updated: July 19, 2026