Jera, Japan’s largest electricity producer, said on Wednesday that net profit for the April-June period nearly halved due to lower profits caused by a lag effect in a fuel price adjustment mechanism. The company stuck to its annual forecast even though its Taketoyo coal-fired power plant is closed.
The 1,070 megawatt (MW) Taketoyo Power Plant in Aichi Prefecture has been closed since the fire on January 31.
Jera, an unlisted company jointly owned by Tokyo Electric Power and Chubu Electric Power, reported profit of ¥93.4 billion ($619 million) for the April-June quarter, down 48% from the same period last year.
The decline in profit was due to a decrease in time-lag gain (when a change in fuel prices is reflected in sales prices with a delay), which shrank to ¥20.3 billion in the quarter from ¥155.3 billion a year earlier.
Jera, Japan’s largest consumer of liquefied natural gas, reported profit excluding slowdown effects rose to ¥73 billion from ¥23.1 billion a year earlier, thanks to improved competitiveness in purchasing LNG and thermal coal.
“We always do our best to buy fuels at lower prices … but last year, some deals where we tried to regulate coal prices backfired. We have made improvements this year,” Jera’s executive officer, Naohiro Maekawa, told a news conference.
When asked when the Taketoyo factory will reopen, Maekawa replied that no date has been set yet.
The closure of Taketoyo is expected to have a negative impact of tens of billions of yen for the entire year due to the use of alternative fuels such as LNG. However, this estimate has already been factored into the annual forecast, he said.
For the year ending March 2025, Jera maintained its annual profit forecast of ¥200 billion.
