Tokyo Electric Predicts 1st Loss in 28 Years on Costs

Oct. 31 (Bloomberg) — Tokyo Electric Power Co., forced to shut the world’s biggest nuclear plant after an earthquake, predicted its first loss in 28 years to pay for repairs and a switch to costlier oil and gas-fired generation.

“I expect next year to get tougher if oil prices stay at current levels,” President Tsunehisa Katsumata told reporters in Tokyo today. He will accept a 20 percent pay cut starting November to take responsibility for the expected loss.


Fuel costs may be 38 percent higher than the utility’s July estimate and Tokyo Electric will spend 164 billion yen ($1.43 billion) to repair the Kashiwazaki Kariwa station, which has been shut indefinitely. The company’s shares have dropped 23 percent since the July 16 earthquake, on concern that record crude oil prices will erode profit.

Japan’s largest power producer expects a net loss of 95 billion yen for the year ending March 31, compared with profit of 298 billion yen a year earlier, Tokyo Electric said in a statement today. In July it had forecast net income of 65 billion yen. The loss would be the company’s first since the year ended March 1980, spokesman Daiki Ohashi said.

“Fuel cost is the factor that will cut Tokyo Electric’s profit,” said Tatsuya Tsunoda, an energy analyst at Mizuho Securities Co.

Bloomberg