Japan's J-Power raises annual profit forecast on higher coal prices
31/10/2022 12:15
TOKYO, Oct 31 (Reuters) - Japan's Electric Power
Development Co Ltd (J-Power) 9513.T on Monday raised its net
profit forecast by 61% to a record 108 billion yen ($727
million) for the year to March 31 as soaring coal prices boosted
gains from its stake in thermal coal mines in Australia.
Australia's Newcastle thermal coal benchmark futures
NCFMc1 have more than doubled so far this year following
sanctions by Western nations on Russia - the world's
third-largest exporter of coal - after its invasion of Ukraine.
J-Power increased its annual net profit estimate to 108
billion yen, a record since its listing in 2004, from its May
forecast of 67 billion yen, thanks to a stronger performance of
three Australian coal mines in which it owns stake.
Spot prices for Australian standard thermal coal are now
estimated at $350 a tonne for 2022, up from its May assumption
of $200 a tonne and the actual $100 a tonne in 2021, it said.
"We expect coal prices to stay at high levels given solid
demand in Europe as an alternative fuel for natural gas,"
J-Power President Toshifumi Watanabe told a news conference.
For Japan's biggest coal-fired power generator and power
wholesaler, higher electricity prices also contributed to its
earnings in power business at home and abroad, including the
United States and Thailand.
Asked whether J-Power would expand its overseas investment,
Watanabe said it had no plans to buy more upstream coal assets,
but intended to keep the existing stakes for the time being.
"We buy coal from the mines that we invest in under
long-term contracts as we can't just leave the fuel costs solely
to market prices," he said.
"We'll continue to invest in the coal mines for a while, but
we don't intend to expand it," he said, adding it was keen to
invest in renewable energy assets overseas.
($1 = 148.5500 yen)
(Reporting by Yuka Obayashi
Editing by Mark Potter)
((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265;))