Japan's JERA returns to profit in first half on lower fuel costs
TOKYO, Oct 27 (Reuters) - Japan's top power generator JERA returned to profit in the first half of fiscal 2023/24, helped by lower fuel procurement costs and higher electricity prices, it said on Friday.
Net profit stood at 291 billion yen ($2.2 billion) for the six months through Sept. 30, against a loss of 214 billion yen a year earlier.
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"The result was also backed by stronger gains from overseas power generation and renewable energy businesses, such as Formosa 2 offshore wind power project in Taiwan," Tetsuo Yoshida, head of global investor relations, told reporters.
JERA, one of the world's biggest buyers of liquefied natural gas (LNG), stuck to its full-year forecast of 350 billion yen from 17.8 billion yen last year.
The resumption of LNG imports from the U.S. Freeport LNG plant will reduce its annual procurement expense by about 90 billion yen, Yoshida said. The Freeport plant was shut after a pipeline explosion in June 2022.
The lower costs will help offset weaker earnings at its trading unit JERAGM, which saw strong trading income during the energy crisis, led by Russia's invasion of Ukraine.
Asked about the impact of the Israel-Hamas war, Yoshida said: "We'll take a bit of time to analyse it by looking at the market and the supply-demand situation."
JERA also secured a sufficient level of LNG that will ensure a stable supply during the winter demand season, he said.
Separately, Chubu Electric Power, one of JERA's parents, posted a record net profit of 311.5 billion yen in the six months to Sept. 30 from a loss of 42.7 billion yen a year ago and raised full-year net profit forecast to record 330 billion yen from 260 billion yen projected in July.
The upgrade came due to lower procurement costs at its power retail unit, a company executive said, adding Chubu will consider new shareholder return measures later this year and whether the current discounts on electricity rates it provides for some customers should continue in the next fiscal year. (Reporting by Yuka Obayashi; additional reporting by Katya Golubkova; Editing by Sonia Cheema, Varun H K and Sohini Goswami)