Cumulative Operating Profit of 5.9 Trillion KRW in Q3
Impact of Reduced Fuel and Electricity Purchase Costs
Debt of 203 Trillion KRW up to Q2
Korea Electric Power Corporation (KEPCO) recorded an operating profit of 3.4 trillion won in the third quarter of this year, marking five consecutive quarters of profit.
On the 13th, KEPCO announced that its third-quarter operating profit was 3.3961 trillion won, a 70.1% increase compared to the same period last year. Sales revenue rose 6.7% year-on-year to 26.1034 trillion won.
Accordingly, the cumulative operating profit up to the third quarter of this year reached 5.9457 trillion won, an increase of 12.3991 trillion won (192.1%) compared to the same period last year (-6.4534 trillion won). Sales revenue increased by 6.4% to 69.8698 trillion won.
A KEPCO official explained, "Based on consolidated financial statements, operating profits have been generated for five consecutive quarters due to increased electricity sales revenue from three rate hikes in 2023 and stabilization of fuel prices. Electricity sales volume increased by 0.8%, and the sales unit price rose by 6.9% due to the three rate hikes in 2023, resulting in an increase of 4.943 trillion won."
Power generation and purchases from nuclear power, liquefied natural gas (LNG), and renewables increased, but coal-fired power generation decreased both in subsidiaries and private purchases. Due to the decline in fuel prices, fuel costs for subsidiaries and power purchase costs from private power producers decreased. Subsidiaries' fuel costs decreased by 4.0325 trillion won, and power purchase costs from private power producers also fell by 3.5247 trillion won.
KEPCO expects its fourth-quarter performance to improve. A KEPCO official said, "Despite the unstable energy prices caused by the recent Middle East conflict, ongoing Russia-Ukraine war, and high exchange rates, we expect an improvement in fourth-quarter performance due to the electricity rate increase implemented on October 24." Since the 24th of last month, residential electricity rates have been frozen, while industrial rates for categories Gap and Eul were raised by 5.2% and 10.2%, respectively.
Although KEPCO has posted profits for five consecutive quarters from the third quarter of last year to the third quarter of this year, it is still insufficient to resolve its massive debt. KEPCO's debt stood at approximately 203 trillion won in the first half of this year, and interest payments on this huge debt continue to accumulate more debt. KEPCO spent 2.28 trillion won on interest expenses in the first half of this year alone.
A KEPCO official stated, "KEPCO will thoroughly and swiftly implement self-help efforts promised to the public, and in cooperation with the government, will discuss various measures to resolve accumulated deficits, including the gradual normalization of electricity rates and reduction of power purchase costs. KEPCO is reducing power purchase costs through the introduction of customer participation load shedding programs and extension of fuel tax reduction periods, and is also steadily implementing financial soundness plans such as austerity management plans."
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