J‑POWER Q1 profit drops 47% as equity‑method earnings slump

It offset higher revenue and operating profit.

Electric Power Development Co., Ltd.'s (J-POWER) first-quarter net profit fell 47.3% to $173.9m (JPY27.4b) from $330.6m (JPY52.1b) a year earlier as lower equity-method earnings after the sale of its US thermal power assets offset higher revenue and operating profit.

Ordinary profit declined 45.9% to $251.3m (JPY39.6b), whilst revenue increased 12% to $1.78b (JPY280.3b) and operating profit rose 11.7% to $230.3m (JPY36.3b).

The company said non-operating income dropped 69.3% to $99.0m (JPY15.6b), "mainly due to the decrease in the share of profit of entities accounted for using equity method following the sale of equity interests in the U.S. thermal power generation business."

Operating expenses increased 12% as fuel costs in the power generation and overseas businesses rose, whilst non-operating expenses climbed 19.5% on higher foreign exchange losses.

Revenue increased as the load factor at thermal power plants rose to 49% from 43%, lifting thermal electricity sales 16% to 7.7 terawatt-hours (TWh). Overseas electricity sales also increased 9.7% to 3.8TWh, driven by higher sales in Thailand.

These gains offset a decline in the water supply rate to 94% from 105%, which reduced renewable electricity sales by 16.2%, and lower electricity sales procured from the wholesale market.

By segment, power generation revenue increased 7.1% to $1.22b (JPY192.7b), but segment income fell 1.8% because of higher fuel and purchased power costs.

Overseas revenue rose 33.8% to $421.3m (JPY66.4b), whilst segment income dropped 67.7% following the sale of equity interests in the US thermal power generation business.

Total assets increased to $24.37b (JPY3.84t) at 30 June from $23.73b (JPY3.74t) at the end of March, driven by construction of the Charger solar power project in the US, investments in the Pak Lay hydropower project in Laos, and the weaker yen.

Interest-bearing debt rose to $12.44b (JPY1.96t), whilst net assets increased to $9.90b (JPY1.56t).

J-POWER said there are no changes to its forecast announced on 12 May, maintaining its full-year earnings guidance.

(US$1 = JYP157.59)