TOKYO—The fall out from this year’s earthquake and tsunami disasters in Japan was felt by industries across the globe, but one Japanese company at the core of the crisis has taken an especially grave financial beating.
Tokyo Electric Power Co. (TEPCO) is the utility behind the unfolding Japanese nuclear disaster. TEPCO reported a 571.7 billion yen ($7.4 billion) loss this quarter and its president said that red ink is only going to swell over restoration and compensation costs.
Its Fukushima Dai-ichi nuclear plant was sent into meltdown by the March 11 quake and tsunami, and has still not been brought under control.
TEPCO president Toshio Nishizawa, who took office recently after his predecessor resigned in disgrace over the nuclear disaster, said he still didn’t 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 didn’t 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 said, adding they’ve not been able to make an assessment at this time.
A bailout will likely be needed to deal with the fiasco.
Some 80,000 people have been evacuated from a no-entry zone around the plant. Farmers and fishermen, including those who live outside the evacuation zone, are demanding damage payments.
It’s still 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 company said its loss for the April-June quarter this year reflected damage compensation totalling 397.7 billion yen ($5.2 billion), while restoration costs and losses totalled 105.5 billion yen ($1.4 billion).
Adding insult to injury, Japanese companies have been cutting back on electricity consumption by 15 per cent due to possible power shortages.