Tokyo Electric Power Co. (9501.TO) said Tuesday it logged a massive $7.4
billion net loss for the three months through June, with its red ink
snowballing on higher fuel and compensation costs as it continues to grapple
with the Fukushima Daiichi nuclear disaster.
The operator of the crippled nuclear power plant booked a net loss of Y571.76
billion for the fiscal first quarter against a year-earlier loss of Y5.45
billion. In May, the company reported a loss of Y1.247 trillion for the 12
months ended March.
But the head of the embattled utility, known as Tepco, said the company is
unlikely to be crushed by swelling liabilities after the government recently
passed a bill to create a state-backed entity to help the company meet mammoth
compensation claims.
"We will not fall into negative net worth once the funds start flowing
in," Tepco President Toshio Nishizawa said at a press conference for the
company's earnings. The firm had Y1.009 trillion in shareholder equity as of
the end of June.
"Since the funds to be provided by the entity will be valuable taxpayers
money, we will do as much as we can on our own through streamlining
efforts," he added.
For the three month-period, the company booked a one-off loss of Y397.7 billion
on estimated provisions to compensate those affected by the nuclear reactor
accident, which was triggered by the March 11 earthquake and tsunami.
The utility did not provide an outlook for the full fiscal year through March with
Nishizawa admitting his company is unable to calculate how much the ultimate
compensation costs will reach.
Compensation liabilities are eventually expected to run into trillions of yen
with a government panel last week outlining interim guidelines that cover a
sweeping range of industries and products that are eligible to receive
compensation. Tepco said it plans to start accepting claims in September and
making the payments in October.
In addition, Tepco reported an extraordinary loss worth Y105.5 billion in
cleanup costs of the crippled nuclear reactors and repair costs of the
quake-damaged facilities. Under its plan to stabilize the plant, Tepco hopes to
bring the crisis to a close by January.
"There is no doubt that raising funds is extremely difficult. We hope to
secure (sufficient) funds by pushing through restructuring measures including
cost cuts and the sale of assets," Nishizawa said, though adding he is not
considering for now seeking additional cooperation from financial institutions
and other stakeholders.
Tepco swung into a quarterly operating loss of Y52.05 billion from a profit of
Y62.88 billion in the previous year, while revenue slid 7.2% to Y1.133 trillion
from Y1.222 trillion.
Combined with the cleanup costs, the company's earnings are reeling under the
weight of soaring fuel costs as it restores thermal power plants to make up for
the lost electricity. Electricity sales also declined 12.1% from a year earlier
on a decline in manufacturing activity and on a widespread campaign to cut back
on power usage.
After opening sharply lower at the start of trade, Tepco's shares gradually
pared their losses and finished unchanged at Y389 on the Tokyo Stock Exchange
Tuesday. Still, shares are off more than 80% from pre-disaster levels.
The
company bases its earnings on Japanese accounting standards.