Japan's JERA forecasts jump in FY23/24 profit as fuel prices weaken

TOKYO, April 28 (Reuters) - Japan's biggest power generator, JERA, predicted on Friday a jump in net profit for the year just begun, driven by weaker fuel prices and a recent resumption in imports of liquefied natural gas from the U.S. Freeport LNG plant after a fire.

JERA, one of the world's biggest LNG buyers, saw net profit reaching 300 billion yen ($2.2 billion) in the financial year that started in April, against 17.8 billion the previous year.

Advertisement: The National Gas Company of Trinidad and Tobago Limited (NGC) NGC’s HSSE strategy is reflective and supportive of the organisational vision to become a leader in the global energy business. ngc.co.tt

A lower procurement cost of LNG, thanks to the restart of the Freeport plant shut in June 2022, will offset a weaker gain on sale of LNG to third parties and lower earnings of trading unit JERAGM, said Tetsuo Yoshida, JERA's head of finance.

"We expect to receive full contracted volume of LNG from Freeport in the current financial year," Yoshida told a news conference.

The Freeport plant was shut after a pipeline explosion in June 2022, disrupting supplies.

But the Texas LNG export plant is now on track to draw as much natural gas from pipelines as it can process into LNG, a sure sign that it is back at full power, data provider Refinitiv said.

JERA's net profit tripled from a year earlier to 17.8 billion yen for the financial year ending in March, as JERAGM's strong earnings and a hefty gain on sale of excessive LNG to other users cushioned higher costs of LNG and thermal coal.

In the last year, JERA bought 7 million tonnes of LNG from the spot market, up from 4.5 million tonnes a year earlier, to replace supply from Freeport, Yoshida said.

Its profit of 17.8 billion yen missed the company's January forecast of 100 billion yen, however, because of an appraisal loss of about 70 billion yen on the derivative trading on thermal coal as coal prices fell sharply, he added. ($1=134.7500 yen) (Reporting by Yuka Obayashi)