Chubu Elec expects JERA to book 50 bln yen LNG resale loss, Energy News, ET EnergyWorld

Chubu Elec expects JERA to book 50 bln yen LNG resale lossTOKYO: Japan‘s Chubu Electric Power Inc said on Friday its JERA joint venture is expected to book a 50 billion yen ($477 million) loss on the resale of liquefied natural gas (LNG) cargoes in the year to March.

Japanese electric utilities have committed to large volumes of LNG under contracts linked to oil prices, yet spot prices are much lower due to oversupply as the pandemic saps demand.

JERA, the world’s biggest buyer of LNG, said this month that it has booked tens of billions of yen in estimated one-off losses on its supply for the year ended on March 31.

On Thursday, JERA, equally owned by Chubu and Tokyo Electric Power Company Holdings, said its recurring profit sank 61 per cent to 41.6 billion yen in the April-June quarter after posting a 9.1 billion yen loss on the resale of LNG, half of which was booked in Chubu’s earnings for the quarter.

JERA did not provide its annual forecast but Chubu on Friday predicted its recurring profit for the current financial year would fall 35 per cent to 125 billion yen as JERA’s losses on reselling LNG cut its profit by 25 billion yen.

“This is based on our own estimate,” said Yoshinobu Mishima, manager at Chubu’s Tokyo office said.

Chubu’s recurring profit for the April-June quarter fell 40 per cent to 48.18 billion yen as power sales slumped.

Source link

Leave a Reply