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Tepco logs ¥616.20 billion group net profit for April-September

Kyodo

Tokyo Electric Power Co. on Thursday reported a group net profit of ¥616.20 billion for the April-September period, swinging into the black on a half-year basis for the first time since the nuclear disaster at its Fukushima No. 1 complex in 2011.

Cost-cutting efforts and household electricity rate hikes also helped the utility to log a pretax profit of ¥141.66 billion, but Tepco President Naomi Hirose said that becoming profitable in the full business year is still “tough” because expenses tend to rise toward the end of the year.

“We must avoid incurring a (unconsolidated) pretax loss for the third consecutive year,” Hirose told a press conference, referring to the promise Tepco made in return for receiving a capital injection of ¥1 trillion from a state-backed fund in July last year.

The net profit logged in the first half of fiscal 2013 through March compares with a net loss of ¥299.48 billion a year earlier. The company attributed the huge net profit to the financial aid provided by the Nuclear Damage Liability Facilitation Fund for compensation payments to people and companies affected by the crisis.

Group sales increased 11.8 percent to ¥3.22 trillion.

The utility did not release an earnings outlook for the current fiscal year due to the difficulty of forecasting when it will be able to restart reactors at its Kashiwazaki-Kariwa nuclear plant in Niigata Prefecture.

Hirose also called for more financial support from the state, stressing it is “impossible” for a single company to bear all the costs of compensation, decommissioning the crippled reactors and decontaminating areas affected by one of the world’s worst nuclear disasters.

As Tepco struggles to turn around its business, a task force of the ruling Liberal Democratic Party on Thursday compiled a proposal that features the use of state funds in activities related to cleaning radiation-contaminated areas in Fukushima Prefecture.

The proposal, to be submitted to Prime Minister Shinzo Abe, possibly next week, said the state should see decontamination activities as “public works projects” linked to the rebuilding of the region.

It also said the state will consider “taking all possible measures, including the cost burden,” for the construction and management of interim storage facilities to keep radioactive soil and other waste created in the cleanup efforts.

More than ¥1 trillion has so far been allocated from the state budget for decontamination efforts, and some estimates show that the costs could eventually reach ¥5 trillion.

But funneling taxpayer money into decontamination could trigger criticism that it is bailing out Tepco. Currently, the government is only covering the expenses until the utility is in a position to pay the money back.

The proposal, meanwhile, also noted the need to consider an organizational change of Tepco to better manage reactor decommissioning and the buildup of radioactive water, such as by creating a separate company in charge of the work within Tepco.