November 27, 2013 / 6:06 AM / 6 years ago

Tepco sees steady recurring profit over 10-year period: source

TOKYO (Reuters) - Tokyo Electric Power Co, operator of the wrecked Fukushima nuclear plant, expects to make recurring profit of between $1.5 billion and $2 billion annually for a 10-year period, assuming it can restart its biggest nuclear plant, according to a source familiar with matter.

A man walking out is seen past Tokyo Electric Power Co (TEPCO)'s logo at the company headquarters in Tokyo July 19, 2012. REUTERS/Yuriko Nakao

The forecast was shown to the utility’s creditors as part of a revised business plan to return to profitability after three years of losses following the meltdowns at its Fukushima Daiichi station in March 2011, the source said.

But the source added that the prediction hinges on the assumption that it will be able to restart its seven-reactor Kashiwazaki-Kariwa nuclear plant northwest of Tokyo from July. That may be optimistic as the local governor strongly opposes a restart of the station without a full account of the Fukushima disaster and tough safety steps being implemented.

Tepco said in a statement it was not the source of the information and details of the business plan have not been finalized.

Recurring income is pretax and before exceptional items, and does not include the massive costs related to the clean-up of the Fukushima complex after an earthquake and tsunami triggered the worst nuclear crisis since Chernobyl.

The forecast of between 150 billion yen ($1.5 billion) and 200 billion yen income covers the decade from March this year and comes after Tepco booked recurring profit of 142 billion yen in the six months through Sep. 30, compared with a loss of 166 billion yen a year earlier.

Tepco racked up recurring losses of more than 727 billion yen and net losses of 1.2 trillion yen in the two years through March 2013.

Nuclear regulators have also said they will take their time vetting the safety of the station, the world’s biggest nuclear plant. All 50 nuclear reactors in Japan have been shut down in the wake of the Fukushima disaster with a portion of them undergoing safety checks.

The source added that according to the business plan, which is being finalized, the utility may switch to a holding company structure as early as the year starting April 2016.

It will also pay an average 100 billion yen annually from April last year to March 2022 to a government fund that has been compensating residents and business hurt by the disaster, the source said.

Sources last week said Tepco will need 2 trillion yen for long-term capital investment in non-nuclear power operations, under the plan.

The figure includes spending to upgrade thermal power plants, and to secure rights to overseas energy resources and participate in overseas power projects.

($1 = 101.4000 Japanese yen)

Reporting by Yoshifumi Takemoto; Additional reporting by Kentaro Hamada and James Topham; Writing by Aaron Sheldrick; Editing by Edwina Gibbs

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