Volatility in Electricity Procurement Prices and Uncertainty over Pass-Through to Selling Prices

「In the electricity business, the Company procures most of the electricity sold to customers from the market, and procurement costs fluctuate due to fuel prices, foreign exchange rates and other factors. Market price fluctuations and changes in the business policies of counterparties could increase procurement costs, customer retention costs and other costs required to fulfill contractual obligations.」

「In the electricity business, the Company procures most of the electricity sold to customers from the market, and procurement costs fluctuate due to fuel prices, foreign exchange rates and other factors. Market price fluctuations and changes in the business policies of counterparties could increase procurement costs, customer retention costs and other costs required to fulfill contractual obligations.」

「During the fiscal year, revenue declined due to the decrease in customer contracts for communications network services amid intensifying price competition among telecommunications operators and the impact of lower electricity trading prices in the electricity business. However, the new plan hedging electricity price volatility was successful. Revenue was ¥269,663 million, down 11.5% from the previous fiscal year, and operating profit was ¥39,586 million, up 196.6%.」

「During the nine months ended 31 December, revenue declined due to the decrease in customer contracts for communications network services amid intensifying price competition among telecommunications operators and the impact of lower electricity trading prices in the electricity business. However, the new plan hedging electricity price volatility was successful. Revenue was ¥199,273 million, down 11.7% year on year, and operating profit was ¥29,680 million, up 178.1%.」

「During the six months ended 30 September, revenue declined due to the decrease in customer contracts for communications network services amid intensifying price competition among telecommunications operators and the impact of lower electricity trading prices in the electricity business. However, the new plan hedging electricity price volatility was successful. Revenue was ¥132,734 million, down 12.2% year on year, and operating profit was ¥21,608 million, up 270.2%.」

「During the nine-month period ended in the first quarter, revenue declined due to a decrease in customer contracts resulting from intensified price competition among telecommunications operators in the communications line services business and the decline in electricity trading prices in the electricity business, among other factors. However, a new plan designed to hedge the risk of fluctuations in electricity trading prices proved effective. Revenue was ¥62,400 million, down 12.1% year on year, while operating profit was ¥12,060 million, up 73.5% year on year.」

「During the fiscal year, the number of subscriptions acquired for communications network services declined as price competition among telecommunications operators intensified, while higher electricity trading prices in the electricity business also affected results. Revenue was ¥304,738 million, up 9.4% from the previous fiscal year, and operating profit was ¥13,345 million, down 62.7%.」

「During the nine months ended 31 December, the number of subscriptions acquired for communications network services declined as price competition among telecommunications operators intensified, while higher electricity trading prices in the electricity business also affected results. Revenue was ¥225,657 million, up 13.7% year on year, and operating profit was ¥10,670 million, down 65.1%.」

「During the first half of the current fiscal year, the number of customers using proprietary products increased, but recurring profit declined due in part to higher electricity trading prices. Revenue was ¥310,002 million, up 14.2% year on year, while operating profit was ¥46,145 million, down 5.9%.」

「During the three months ended 30 June, the number of subscriptions acquired for communications network services declined as price competition among telecommunications operators intensified, while higher electricity trading prices in the electricity business also affected results. Revenue was ¥71,015 million, up 12.4% year on year, and operating profit was ¥6,952 million, down 42.7%.」

「During the nine months ended 31 December, the number of subscriptions acquired in the network business declined as price competition among telecommunications operators intensified. In the electricity business, the company increased procurement through bilateral transactions at unit prices higher than market prices to hedge the risk of fluctuations in electricity trading prices. As a result, revenue was ¥198,456 million, unchanged year on year, and operating profit was ¥30,563 million, also unchanged year on year.」

「In the electricity business, the Company increased procurement through bilateral transactions at unit prices higher than market prices to hedge the risk of fluctuations in electricity trading prices, among other measures. Revenue was ¥128,397 million, down 1.6% year on year, and operating profit was ¥22,396 million, down 3.8% year on year.」

「For the current consolidated fiscal year, revenue was ¥278,238 million, up 20.0% year on year, while operating profit was ¥22,817 million, down 12.1% year on year, reflecting the impact of higher electricity trading prices.」

「During the nine-month period ended in the third quarter, the Company recognized a ¥2,269 million provision for onerous contracts. The provision expense is included in “Cost of sales” in the condensed interim consolidated statements of profit or loss. This resulted from the sharp rise in market prices from late December 2020 through late January 2021, as the Group's retail electricity services procure most of the electricity sold to customers from the market.」

「Depending on market conditions, the Company may be unable to pass the full increase through to selling prices, which could affect the profitability of the business.」

「Our retail electricity services procure most of the electricity sold to customers from the market. Procurement prices fluctuate due to fuel prices, foreign exchange rates and sharp increases in market prices during the high-demand summer and winter seasons. Depending on market conditions, we may be unable to pass the full increase through to selling prices, which could affect the profitability of the business.」