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Japan utility records massive loss from disaster

2011-08-09 16:33

TOKYO - The utility behind the unfolding Japanese nuclear disaster reported a 571.7 billion yen ($7.4 billion) quarterly loss Tuesday and its president is expecting the red ink to swell over restoration and compensation costs.

Tokyo Electric Power Co's Fukushima Dai-ichi nuclear power plant was sent into meltdown by the March 11 quake and tsunami, and has still not been brought under control.

President Toshio Nishizawa, who took office recently after his predecessor resigned in disgrace over the nuclear disaster, said Tuesday he still did not know the full extent of the red ink because of too many unknowns - such as the size of future compensation payments.

He also said he did not know how much of a government bailout may be needed to ride out the disaster, but promised that his company was trying to take care of problems on its own by selling assets and cutting costs.

"We will put in our best effort," he told reporters at Tokyo headquarters. "We have not been able to make an assessment at this time."

But a bailout is expected to be needed to deal with the fiasco.

Some 80,000 people have been evacuated from a no-entry zone around the nuclear plant. Farmers and fishermen, including those who live outside the evacuation zone, are demanding damage payments.

It is unclear when people will be able to return to their evacuated homes, if ever, and beef and vegetable shipments have been banned because of high radiation readings.

The utility, known as TEPCO, had a loss of 5.4 billion yen in the April-June quarter the previous year. It sank into a 1.25 trillion yen ($16 billion) loss for the fiscal year ended March over the disaster.

TEPCO said its extraordinary loss for the April-June quarter this year reflected damage compensation totaling 397.7 billion yen ($5.2 billion), while restoration costs and losses totaled 105.5 billion yen ($1.4 billion).

At least three reactors at Fukushima Dai-ichi were damaged, and began spewing radiation into the air and ocean, after the magnitude-9.0 earthquake set off a towering tsunami that damaged backup generators for critical cooling systems for the nuclear fuel.

Another factor crimping TEPCO's bottom-line is how Japanese companies are cutting back on electricity consumption by 15 percent because of possible power shortages caused by the Fukushima Dai-ichi woes.

Another nuclear plant, in central Japan, has also been shut down over growing fears about the safety of plants against quakes and tsunami.

Air conditioners have been turned up high in Tokyo offices and trains, and neon lights are turned off to prevent a power crunch.

TEPCO said electricity sales in the fiscal first quarter slid 12 percent from the same period the previous year. Quarterly sales dropped 7 percent to 1.13 trillion yen ($14.7 billion).

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