Nomura says Japan’s power dearth will squeeze corporate profits

TOKYO, March 25 (Reuters) – A shortfall in electric power
could squeeze recurring profit by 5 percent or 1.4 trillion yen
($17 billion) in the business year beginning on April 1 at
Japanese corporations on the Nomura 400 companies index, the
brokerage said in a report on Friday.

“We see a growing risk of prolonged problems with
electricity supply at companies covered by Tokyo Electric Power
and Tohoku Electric Power ,” Japan’s biggest
securities company said.

As much as 45 percent of Japan’s manufactured goods are
produced in the area covered by the two utilities, Nomura said.
A 10 percent shortfall in power would pare Japan’s factory
output by as much as 4 percent, it estimated.

Tokyo Electric Power, Japan’s largest utility, is struggling
to maintain power to households and companies following the loss
of nuclear reactors and other power generating capacity in
Japan’s March 11 earthquake. As temperatures rise in summer and
demand peaks, Tokyo Electric expects its power supply capacity
to be 46,500 MW, falling short of peak demand of 55,000 MW.

That could lead the utility to impose more partial power
outages to avert wider blackouts, forcing some companies to curb
($1 = 80.985 Japanese Yen)

(Reporting by Tim Kelly; Editing by Michael Watson)

Nomura says Japan’s power dearth will squeeze corporate profits