Tokyo Electric Power Co. posted a net loss of 571.7 billion yen ($7.39 billion) for the April-June quarter, largely due to about 400 billion yen earmarked to compensate victims of the Fukushima nuclear crisis.
Tokyo Electric Power Co. posted a net loss of 571.7 billion yen ($7.39 billion) for the April-June quarter, largely due to about 400 billion yen earmarked to compensate victims of the Fukushima nuclear crisis.
The net loss was the largest ever posted by the utility.
However, the extraordinary loss for compensation payments in that period does not cover the expected huge amount of losses caused by rumors of radiation contamination from the crippled Fukushima No. 1 nuclear power plant.
According to TEPCO's financial results released Aug. 9, the company's sales fell 7.2 percent year on year to 1.13 trillion yen, as revenues from electricity use declined due to lower production after the Great East Japan Earthquake and nationwide energy-saving campaigns.
TEPCO recorded an operating loss of 52 billion yen. The company was forced to increase its use of thermal power generation after operations were suspended at nuclear power plants following the quake. As a result, costs for fuel soared 28.7 percent from a year ago to 404.7 billion yen.
The company recorded another extraordinary loss of 105.3 billion yen, allocated to efforts to bring the crisis at the plant under control.
The estimated compensation cost in the April-June financial results totaled 397.7 billion yen. The assessment was based on TEPCO data and an interim guideline issued Aug. 5 by the government's panel on disputes over nuclear accident compensation.
The assessment covers the period until the final phase of TEPCO's road map to achieve a cold shutdown of the damaged reactors at the Fukushima plant ends between October and January.
The estimated compensation cost comprises: 88.2 billion yen for mental distress caused by the nuclear accident; 101.2 billion yen to companies that became inoperable due to evacuation orders and other reasons; 141.3 billion yen to people who could not work because of the accident; and 66.8 billion yen for losses caused by shipment restrictions on agricultural and marine products.
The estimate did not cover indirect damage to affected companies' partners, evacuation costs and damage resulting from radiation rumors.
TEPCO President Toshio Nishizawa told reporters Aug. 9 that the company included all factors it could reasonably assess in calculating the compensation amount. But he acknowledged that damage from the accident could continue to spread, making it difficult to accurately provide an overall compensation figure.
The central government has solicited support from financial institutions and other related parties for TEPCO's compensation payments.
Nishizawa said he believed banks have already been very supportive by providing low-interest loans. He said he did not think TEPCO would need further assistance for the time being.