KEPCO Q3 Operating Loss of 936.7 Billion KRW... Cumulative Deficit Exceeds 1 Trillion KRW This Year

Operating Loss Widened Compared to Previous Two Quarters... "Impact of Profitability Decline"
KEPCO's Efforts in Management Efficiency and Securing Core Technologies for Carbon Neutrality

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Haeyoung] Korea Electric Power Corporation (KEPCO) recorded an operating loss of 936.7 billion KRW in the third quarter of this year. This marks the second consecutive quarter of deficits. The cumulative loss for this year has exceeded 1 trillion KRW.

On the 12th, KEPCO announced that its consolidated operating loss for the third quarter of this year was preliminarily estimated at 936.7 billion KRW, turning to a deficit compared to the same period last year (operating profit of 2.3322 trillion KRW).

Following an operating loss of 764.8 billion KRW in the previous second quarter, this is the second consecutive quarter of losses. As a result, the cumulative operating loss through the third quarter of this year was calculated at 1.1298 trillion KRW.

Sales in the third quarter increased by 4.8% year-on-year to 16.4622 trillion KRW, and net loss turned to a deficit of 1.0259 trillion KRW.

Cumulative sales for the first three quarters reached 45.0564 trillion KRW, up 2.7% compared to the same period last year.

The operating loss is interpreted as resulting from decreased profitability. Due to high oil prices, fuel costs and power purchase costs increased, while electricity rates were frozen in the third quarter, worsening profitability.

According to KEPCO, electricity sales volume from the first to third quarter of this year increased by 4.6% compared to the same period last year, due to an increase in the average operating rate of the manufacturing industry.

However, since the increase in fuel costs was not reflected in electricity rates, the sales unit price fell by 2.2%, resulting in only a 1.9% increase in electricity sales revenue.

KEPCO introduced a fuel cost linkage system this year, which reflects fuel costs incurred in electricity production into electricity rates on a quarterly basis.

Electricity rates for the second and third quarters should have risen reflecting the upward trend in oil prices, but the government froze the rates citing reasons such as stabilizing the lives of citizens struggling with the prolonged COVID-19 pandemic.

Fuel costs of KEPCO’s subsidiaries and power purchase costs from private power producers from the first to third quarter increased by 1.8965 trillion KRW and 2.8301 trillion KRW respectively compared to the same period last year.

Additionally, other operating expenses expanded to 735.2 billion KRW due to increased depreciation expenses from the acquisition of power generation and transmission/distribution facilities.

Meanwhile, KEPCO plans to make strong efforts to improve management efficiency, including limiting the unit cost of power supply to within 3%. It also stated that it will strengthen efforts to create new revenue sources such as securing core carbon-neutral technologies and expanding overseas renewable energy projects.

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