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Tepco’s Profit Plummets Amid Declining Sales and New Competition

Operating profit falls by 37 percent in the first quarter

More than 750,000 Tepco customers have switched providers

Tokyo Electric Power Co. Holdings Inc., operator of the wrecked Fukushima Dai-Ichi nuclear plant, said first-quarter operating profit plummeted 37 percent as sales declined amid faltering demand and new entrants into Japan’s power market.

Tepco, as Japan’s biggest utility is known, posted operating profit of 143.6 billion yen ($1.37 billion) for the three months ended June 30, down from 228.3 billion yen a year ago, the company said in a statement Thursday.

Revenue fell about 18 percent to 1.26 trillion yen as the company’s electricity sales volume dropped and rates were automatically lowered by the nation’s price adjustment system. The system adjusts monthly electricity rates for each utility based on a three-month average of import prices for LNG, crude oil and coal.

Japan’s regional utilities are getting squeezed by new entrants after the country liberalized its retail power market in April, allowing consumers to choose their electricity providers for the first time. Tokyo Electric hopes to boost its profits by expanding its domestic gas sales when the market fully opens up next year, increasing its foreign investments and restarting its operable nuclear reactors.

Tokyo Electric Power Co. Holdings Inc., operator of the wrecked Fukushima Dai-Ichi nuclear plant, said first-quarter operating profit plummeted 37 percent as sales declined amid faltering demand and new entrants into Japan’s power market.

Tepco, as Japan’s biggest utility is known, posted operating profit of 143.6 billion yen ($1.37 billion) for the three months ended June 30, down from 228.3 billion yen a year ago, the company said in a statement Thursday.

Revenue fell about 18 percent to 1.26 trillion yen as the company’s electricity sales volume dropped and rates were automatically lowered by the nation’s price adjustment system. The system adjusts monthly electricity rates for each utility based on a three-month average of import prices for LNG, crude oil and coal.

Japan’s regional utilities are getting squeezed by new entrants after the country liberalized its retail power market in April, allowing consumers to choose their electricity providers for the first time. Tokyo Electric hopes to boost its profits by expanding its domestic gas sales when the market fully opens up next year, increasing its foreign investments and restarting its operable nuclear reactors.

http://www.bloomberg.com/news/articles/2016-07-28/tepco-s-profit-plummets-amid-declining-sales-and-new-competition

August 3, 2016 Posted by | Japan | , | Leave a comment