Oil Report

Kansai Elec cuts profit outlook on nuclear delay

TOKYO, Dec 26 (Reuters) - Kansai Electric Power Co 9503.T, Japan's second-biggest utility, cut on Wednesday its 2007/08 group operating outlook by 20 percent, hit by the prolonged shutdown of a nuclear power unit and higher fuel prices.

The Osaka-based company now expects an operating profit of 160 billion yen ($1.40 billion) for the year to March.

That compares with its October forecast for a 200 billion yen profit and an average forecast by 10 analysts surveyed by Reuters Estimates for a 208 billion yen profit.

The company said its 826-megawatt Takahama No.2 nuclear unit is expected to remain shut through the end of March.

The planned inspection on the No.2 unit has been underway since August, but the restart has been delayed as the company inspects the cause of a scratch, which came into light earlier this month.

The lower-than-expected nuclear and hydro power generation and higher fuel prices would boost the purchase of fuel, including direct-burned crude oil and fuel oil, for thermal power generation by a total 63 billion yen, a Kansai spokesman said.

That is offset by cost cuts and a lighter facility repair, which is worth a total 23 billion yen, the spokesman added.

Ahead of the announcement, the Kansai shares closed 1.5 percent lower at 2,670 yen, compared with a 0.65 percent rise in the Nikkei index .N225. ($1=114.05 Yen) (Reporting by Osamu Tsukimori; Editing by Ramthan Hussain)