The Kansai Electric Power Company (9503) Investor Day 2025 summary

Financial Performance and Investment Outlook

• Optage's free cash flow has been positive, but upcoming investments will increase, potentially turning cash flow negative in the short term, with expectations to return positive in 5–10 years.

• Optage's ROA has reached 15%, considered an ultimate figure due to efficient asset utilization, but is expected to decrease as new business areas are pursued.

• Kanden Realty and Development's ROA is currently below 5.5%, with a target to exceed 5% by 2025, aligning with group averages and peer benchmarks.

• Asset recycling is a key strategy, with plans to double disposals to JPY 180 billion by 2030, using market value for calculations.

• Capital recycling of JPY 900 billion is planned within a JPY 1.1 trillion investment framework, focusing on both Kansai and Tokyo Metropolitan Area, with overseas exposure capped at 10%.

Business Overview and Performance

• Operates across consumer, mobile, and business solutions, with 1.7M FTTH, 1.37M MVNO, and 100K corporate lines as of October 2025.

• Focuses on infrastructure and telecom services, leveraging a 380,000 km proprietary fiber network in Kansai.

• Revenue grew at a 4% CAGR over the past decade, reaching ¥258.2bn in FY2025, with ordinary profit at ¥47bn and ROA at 15%.

• Annual CAPEX exceeded ¥40bn, with new investments in growth areas starting FY2025.

Strategic Direction and Growth Initiatives

• Optage will maintain a balance between consumer and corporate businesses, leveraging its fiber network for growth in both segments.

• Prioritizes rapid rollout of new consumer services, maintaining No.1 customer satisfaction for 18 years and increasing ultra-high-speed plan adoption.

• Achieved No.2 MVNO market share, focusing on enterprise IoT demand and stable subscription growth.

• Expands business solutions as a "Carrier's Carrier," providing network and data center services to other carriers.

• Kanden Realty and Development is expanding in residential, rental, and office properties, with a focus on prime locations and capital gain opportunities.