Energy Public Enterprises' Poor Performance... KEPCO's 'Accumulated Deficit of 47.5 Trillion Won' and Gas Corporation's '12 Trillion Won in Receivables'

KEPCO "Pursuing Elimination of Accumulated Deficit through Self-Help Efforts and Electricity Rate Realism"
KOGAS "Expecting Performance Improvement from Next Year"

Korea Electric Power Corporation (KEPCO) and Korea Gas Corporation (KOGAS) recorded poor performance in the second quarter as well. KEPCO's cumulative deficit exceeded 47 trillion won, and KOGAS's outstanding receivables increased to 12 trillion won.

On the 11th, KEPCO announced that its sales for the first half of the year amounted to 41.2165 trillion won, operating expenses were 49.6665 trillion won, resulting in an operating loss of 8.45 trillion won.

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

KEPCO has recorded operating losses for nine consecutive quarters since the second quarter of 2021. During this period, the cumulative deficit has grown to approximately 47.5 trillion won.

Electricity sales revenue in the first half of this year decreased by 0.8% due to sluggish exports and other factors, but sales unit price rose due to tariff hikes and fuel cost adjustment charges, 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 2.0918 trillion won. KEPCO explained that although the overall volume 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 subsidiaries' fuel costs rose due to the continued impact of last year's sharp fuel price hikes, resulting in increased power purchase costs through the power market.

KOGAS's operating profit in the first half of this year was 793.4 billion won, down 408.6 billion won (about 34%) compared to the same period last year.

KOGAS supplies LNG raw materials at cost without profit, but if temporary gains or losses occur, they are settled in the following quarter. Accordingly, the raw material cost gains and losses incurred in 2022 were deducted from the operating profit in the first half of 2023 (295.2 billion won).

Additionally, the expansion of urban gas fee support for vulnerable groups during the winter season (December to March) (from the previous 96,000 won to an adjusted 592,000 won) caused a temporary decrease in KOGAS's operating profit (196.2 billion won).

Outstanding receivables for residential urban gas in the first half of the year increased by 3.6579 trillion won compared to the end of the previous year, reaching approximately 12.2435 trillion won.

Sales increased by 14% compared to the same period last year, reaching 26.0575 trillion won. This was due to a decrease in sales volume by 1.98 million tons (about 10%) compared to the same period last year, influenced by a rise in average winter temperatures, but the average sales unit price increased by 5.18 won/MJ (about 27%) due to rising oil prices and exchange rates.