Tokyo Electric Power Co., operator of the wrecked Fukushima Dai-Ichi nuclear plant, said first-quarter operating profit tripled as a drop in fuel prices helped cut costs.
Tepco, as Japan’s biggest utility is known, posted an operating profit of 228.3 billion yen ($1.85 billion) for the three months ended June 30, compared with 70.7 billion yen a year ago, the company said in a statement Wednesday.
The company benefited from a more than 45 percent plunge in liquefied natural gas prices after crude oil fell to a record low. More than a third of Tepco’s power generation capacity comes from LNG, compared with 14 percent from oil and 8 percent from coal.
Factoring in the impact of a weaker yen, the plunge in oil prices alone boosted current profit by 276 billion yen, Tepco said.
“With the drop in the price of crude and a minimization of costs, the operating profit is in the black for the second year in a row,” the company said in the statement.
Tepco spent 35 percent less on LNG purchases in the first quarter, while consumption of the fuel fell by 5 percent. The company’s spending on crude oil rose by 7.5 percent, while its use was up 25 percent, the company said.
The utility’s purchases of coal rose 4.9 percent to 1.75 million metric tons, resulting in a 3.9 percent increase in spending on the fuel.
Indonesia was Tepco’s largest crude supplier last year, while Australia was the top coal provider.
Total sales dipped 1.1 percent to 1.55 trillion yen as the company generated 6 percent less capacity in the quarter.
Japan’s power consumption dropped 1.8 percent in the quarter from a year earlier, the fifth straight quarterly decline, to 189 terawatt hours, according to industry figures. That’s the lowest quarterly use since 2000.
With Tepco struggling to win approval to restart its nuclear reactors, the drop in fuel costs provides relief.
In June, the price of LNG imported into Japan dropped to $7.60 per million British thermal units, the lowest level in two years. Power utilities with a high ratio of LNG will see an increase in profits, Syusaku Nishikawa, an analyst at Daiwa Securities Co., said by e-mail.
Tepco’s first-quarter net income was 203.3 billion yen, compared with a net loss of 173 billion yen a year ago. The company’s net income is influenced by costs related to the payout to those affected by the Fukushima nuclear accident more than four years ago.