Daelim Energy Credit Rating Upgraded from A- to A

[Asia Economy Reporter Onyu Lim] Daelim Energy, a developer in the power generation sector within Daelim Group, announced on the 29th that its credit rating assigned by Korea Credit Rating has been upgraded from A- to A.

The reasons cited for the credit rating upgrade include improved performance of domestic and overseas subsidiaries and excellent financial structure as a holding company. The financial stability is increasing as the performance and operating cash flow of Daelim Energy’s main subsidiaries, Pocheon Power and Poseung Green Power, improve.

Pocheon Power faced difficulties due to the domestic private power generation market slump after commencing commercial operation in 2014, but succeeded in turning a net profit in 2018 through capacity charge increases and efforts to reduce operating costs. In 2019, net profit increased to 27.7 billion KRW. Poseung Green Power, a combined heat and power plant using biomass fuel, has shown favorable performance based on revenue from electricity sales, district heating business, and sales of renewable energy certificates since starting commercial operation in 2018.

Excellent operating results have also been recorded in overseas power projects. In particular, Daelim Energy’s ownership of the Australian Millmerran coal-fired power plant saw net profit in 2019 reach 47.9 billion KRW, a significant improvement from 24 billion KRW in 2018. The private power generation project in Bangladesh, invested in 2016, also completed investment recovery in 2019 with a high rate of return.

Additionally, Korea Credit Rating cited Daelim Energy’s excellent financial structure as a mid-tier holding company as another reason for the credit rating upgrade. As of the end of March 2020, Daelim Energy maintained a debt ratio and debt dependency of 37.6% and 26.1%, respectively, which are low compared to peers in the same industry.

A Daelim Energy official stated, “Since its establishment in December 2013, Daelim Energy has developed and invested in 13 power generation projects across 7 countries, showing tangible results,” adding, “With the upcoming commercial operations of the US Niles combined cycle power plant, Jordan wind power, Chile solar power, and Bangladesh heavy oil power plants currently under construction, performance is expected to improve further.”

This content was produced with the assistance of AI translation services.