The Okinawa Electric Power Company, Incorporated

Business Details

Supplies electricity to customers within its service area of Okinawa Prefecture, combining its own thermal and new energy power generation with electricity received from other companies. Electricity sold in FY2025 (fiscal year data) was 7,206 million kWh (down 1.8% year on year), affected by demand declines from customer switching to other providers and lower summer temperatures. Sales of ¥207,578 million account for approximately 94% of consolidated total sales, making this the core segment.

Recent Overview

Electricity sold down 1.8% year on year, but operating income up 5.3% due to lower fuel costs

In the Electric Power Business for FY2025 (fiscal year data) (fiscal year ending March 2026), electricity sold decreased 1.8% year on year to 7,206 million kWh due to demand declines from customer switching to other providers and lower summer temperatures, and sales fell to ¥207,578 million (down 7.3% year on year). On the other hand, operating expenses decreased 7.7% year on year to ¥201,952 million due to lower fuel costs and reduced electricity purchased from other companies amid falling fuel prices, and operating income improved to ¥5,626 million (up 5.3% year on year). The electricity tariff relief subsidy declined substantially to ¥5,608 million (prior period: ¥9,905 million).

Key Products

Growth Drivers

• Improved cost structure through reduced fuel costs and reduced electricity purchased from other companies amid falling fuel prices (standalone Electric Power Business operating expenses down 7.7% year on year)
• Support for electricity demand from economic expansion driven by robust tourism demand in Okinawa Prefecture
• Increase in wheeling revenue (¥10,387 million, versus ¥9,533 million in the prior period): expanded network usage amid progress in electricity market liberalization
• Carbon neutrality initiatives and revenue diversification through expansion of the PV-TPO business (Carrier Roof)
• Strengthened procurement capability, cost optimization, and DX promotion through the Okiden PX project
• Strengthening of the future supply base through expanded capital expenditure, as shown by the increase in construction in progress (¥43,997 million)

Risks

• Fuel price volatility risk: fluctuations in international market prices for coal, LNG, heavy oil, etc. directly affect fuel cost adjustment amounts and earnings. Resource price trends remain extremely uncertain amid the situation in the Middle East and other factors
• Risk of reduction or termination of electricity tariff relief measures (subsidies): ¥5,608 million was recognized in FY2025 (fiscal year data) (a substantial reduction from ¥9,905 million in the prior period), and policy changes affect earnings
• Risk of demand decline from customer switching to other providers: electricity sold in both the Lighting and Power segments continued to fall below the prior period amid progress in electricity market liberalization
• Risk of aging in-house power generation facilities and rising repair costs: the book value of steam power generation facilities continued to decline to ¥76,065 million (prior period: ¥83,211 million), increasing the need for replacement investment
• Risk of increased interest expense from rising interest-bearing debt: standalone interest expense increased substantially to ¥2,542 million (prior period: ¥1,861 million)
• Risk of increased grid stabilization costs accompanying the expansion of renewable energy adoption
• Risk of damage to supply facilities from natural disasters, cyberattacks, and similar events