Tepco expects $8.95bn loss

TEPCO, the operator of the crippled Fukushima Daiichi nuclear plant on Japan's northeast coast, said on Monday it expects to post a net loss of $8.95 billion in the year to March. The company said its shortfall would be 695 billion yen, in a year during which it has faced massive costs to deal with reactor meltdowns, as well as increased imports of fossil fuels to make up for a nuclear power shortfall. The group net loss forecast is worse than a previous prediction for a 600 billion yen shortfall and reflects an increase in projected compensation payouts to those affected by the world's worst atomic disaster in a generation. Earlier on Monday, Tokyo said it had approved a fresh 690 billion in aid for TEPCO to help it meet compensation claims. The utility said its sales declined 4.0 percent from a year earlier in the first three quarters to 3,800.8 billion yen as "customers cooperated in saving electricity and industrial activity declined," it said in a statement. Sales of electricity dropped 5.4 percent from a year earlier to 3,371.6 billion yen in the three quarters. On the expenditure side, TEPCO cut personnel costs by reducing salaries and bonuses and also cut procurement and operational costs. "But a decline in nuclear power generation led to a large increase in fuel costs," the company said. The bulk of Japan's nuclear reactors are offline in the wake of the crisis at Fukushima, with local communities unwilling to give the green light for them to be restarted after safety checks. This has meant electricity companies have been forced to ramp up their use of thermal fuels, such as coal, which has added to their costs. TEPCO said it had recorded an extraordinary profit of 1,619.5 billion yen including 1,580.3 billion yen it is to receive from the state to help it meet compensation claims. On the other side of the ledger it showed an extraordinary loss of 2,001.6 billion yen, including 1,644.5 billion yen it expects to pay out in compensation and 312.2 billion yen needed to repair assets damaged by earthquake-tsunami of March 11 last year. In the year to March 2012, TEPCO "expects electricity demand to remain relatively weak after the first three quarters" with annual electricity sales estimated at 264.5 billion kilowatt-hours, down from a previously forecast of 267.1 billion kilowatt-hours. As a result, annual consolidated revenue is estimated at about 5,280 billion yen, down from a previous forecast of about 5,315 billion yen.