KEPCO Reports Operating Loss of 8.5 Trillion Won in First Half... "Impact of Last Year's Sharp Fuel Price Surge"

Sales of 41.2 Trillion Won · Operating Expenses of 49.7 Trillion Won
KEPCO "Pursuing Resolution of Accumulated Deficit through Self-Help Efforts and Electricity Rate Realism"

Korea Electric Power Corporation (KEPCO) recorded an operating loss again in the second quarter of this year, marking nine consecutive quarters of deficits. The operating loss for the first half of this year alone reached 8.5 trillion won.

On the 11th, KEPCO announced that its first-half financial results showed sales of 41.2165 trillion won and operating expenses of 49.6665 trillion won, resulting in an operating loss of 8.45 trillion won.

A KEPCO official explained, "Compared to the same period last year, the operating loss decreased by 5.8533 trillion won. Sales increased by 9.2244 trillion won due to tariff adjustments, but operating expenses rose by 3.3711 trillion won due to increases in fuel costs and power purchase costs."

Electricity sales revenue in the first half of this year decreased by 0.8% due to sluggish exports and other factors, but the sales unit price rose due to tariff hikes and the application of fuel cost adjustment tariffs, increasing revenue by 9.1522 trillion won.

Subsidiaries' fuel costs increased by 403.5 billion won, and power purchase costs from private power producers rose by 2.918 trillion won. KEPCO explained that although the overall scale of power generation and purchases decreased due to reduced electricity demand, power purchases increased due to the entry of new private coal power plants, and the subsidiaries' fuel costs rose due to the continued impact of last year's sharp fuel price hikes. Additionally, power purchase costs through the electricity market also increased.

Other operating expenses increased by 875.8 billion won due to higher depreciation expenses from the acquisition of power generation and transmission/distribution facilities.

A KEPCO official stated, "Although the operating loss in the second quarter significantly decreased compared to the first quarter due to tariff adjustments and fuel price stabilization, the deficit in the first half is expected to lead to a large reduction in reserves by the end of 2023 and future restrictions on financing. To overcome the financial crisis, we will accelerate austerity and self-help efforts under the 'Financial Soundness and Innovation Plan,' and through close consultation with the government, we will promote the realization of electricity tariffs based on cost principles and resolve financing risks."