TEPCO chief vows cost cuts amid $3.68B loss

In this Feb. 20, 2012, photo, members of the media in protective suits and masks, escorted by an official of Nuclear and Industrial Safety Agency (second from left) tour Tokyo Electric Power Co.’s crippled Fukushima Dai-ichi nuclear power plant in Fukushima Prefecture, northeastern Japan. TEPCO’s chief on Wednesday, August 1, 2012, vowed “nothing was sacred” in his bid to chop costs as the world’s biggest utilities firm posted a $3.68 billion quarterly loss. AP PHOTO/ISSEI KATO

TOKYO—Tokyo Electric Power’s chief on Wednesday vowed “nothing was sacred” in his bid to chop costs as the operator of Japan’s crippled Fukushima nuclear power plant posted a $3.68 billion quarterly loss.

The giant utility, which was effectively nationalized Tuesday after receiving 1.0 trillion yen ($12.8 billion) of taxpayer money to stay afloat, posted a net loss of 288.4 billion yen in the three months to June.

That was about half TEPCO’s loss in the same three months a year ago, the first full quarter after the accident at Fukushima sparked the worst nuclear crisis in a generation.

But the embattled firm, one of the world’s biggest utilities, forecast a tough year ahead as it bears the brunt of massive compensation costs and higher power generation expenses, even after the bailout and a customer rate hike.

Last month, the government allowed TEPCO to raise household electricity rates in its service area, including Tokyo, by an average 8.46 percent.

“While we truly appreciate it, we are sorry that we had had to ask the public to carry the burden,” TEPCO President Naomi Hirose told a press briefing in Tokyo on Wednesday.

The firm’s chief added: “We will continue to do whatever we can to reduce costs. We are reviewing everything, and nothing is sacred.”

Sales in the latest quarter rose 15.6 percent from a year ago to 1.31 trillion yen, the firm said.

For the current year to March 2013, TEPCO said it expected a net loss of 160 billion yen on sales of 5.97 trillion yen, up 11.7 percent on sales last year.

The company previously said it hoped to swing back to profit in the fiscal year ending March 2014.

The latest results come after TEPCO posted a massive 781 billion yen annual loss, after it had to boost imports of fossil fuels to make up for a nuclear power shortfall when Japan switched off its stable of nuclear reactors.

Only two reactors have since been restarted.

Hirose on Wednesday said TEPCO’s fuel costs have skyrocketed in the wake of the crisis, shooting up about 54 percent from a year ago.

TEPCO is also facing massive compensation claims stemming from the disaster.

Japan was plunged into the world’s worst nuclear crisis since Chernobyl after TEPCO’s Fukushima Daiichi nuclear plant was hit by a killer tsunami triggered by a huge earthquake on March 11, 2011.

The power station went through meltdowns and explosions, contaminating vast swathes of farmland and forcing tens of thousands of people from their homes.

The clean-up is expected to take decades, with scientists warning that some settlements may have to be abandoned.

The public bailout that TEPCO received on Tuesday gives the government a 50.11 percent stake in the utility’s voting rights.

And the deal has an option that allows the Nuclear Damage Liability Facilitation Fund to raise that stake up to nearly 76 percent to impose stronger control if TEPCO fails to push reforms.

However, there are plans to return the utility to “a purely private company in course of time,” industry minister Yukio Edano said Tuesday.

The company’s president on Tuesday said TEPCO had won a “last chance” to transform itself into a “New TEPCO” and it would make “utmost efforts” to compensate those affected by the meltdown disaster.

The firm’s shares closed 2.29 percent lower at 128 yen in Tokyo trade on Wednesday, with the earnings released after markets closed.