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Kyushu Electric poised to turn first profit in 5 years

TOKYO -- With two of its nuclear reactors finally in operation again, Kyushu Electric Power is on track to generate a net profit this fiscal year after four consecutive years of red ink.

     The utility, which serves southern Japan, restarted Thursday the No. 2 reactor at its Sendai plant in Kagoshima Prefecture. Commercial operations are slated to resume in mid-November.

     With the Fukushima Daiichi accident of March 2011 prompting the shutdown of nuclear reactors in Japan, high costs for running fossil-fuel plants have squeezed earnings at Kyushu Electric. The company sustained a 114.6 billion yen ($955 million) net loss for the year ended March.

     The Sendai plant's No. 1 reactor came online in August and returned to commercial operation in September. Each running reactor at the site pushes up Kyushu Electric's monthly profit by 7.5 billion yen.

     If all goes as planned at the No. 2 reactor, the utility can expect a total profit boost of 90 billion yen for fiscal 2015.

     In addition, the company has been working toward an annual cost reduction of 153 billion yen through such steps as delaying facility repairs.

     Even if the reactors face trouble down the road, the company plans to secure a profit by further slashing costs, an official said.

     Kyushu Electric spent more than 300 billion yen over four years on upgrading nuclear plants to meet tougher standards introduced after Fukushima. Long-term borrowings at the end of fiscal 2014 had shot up more than 1 trillion yen compared with four years earlier.

     The utility's current power rates assume that two more reactors, located at the Genkai plant in Saga Prefecture, will also restart. Getting them up and running soon is a must for restoring Kyushu Electric's financial health.

(Nikkei)

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