[Click eStock] "KEPCO 2Q Loss Expected to Narrow... Annual Profit Possible in 2024"

Shinyoung Securities forecasted on the 26th that Korea Electric Power Corporation (KEPCO) is expected to reduce its operating loss margin in the second quarter of this year. Accordingly, they maintained a 'Buy' investment rating and a target price of 27,000 KRW.

Researcher Kwon Deok-min of Shinyoung Securities stated, "The second quarter sales are expected to reach 19.4 trillion KRW, a 24.5% increase year-on-year, with an operating loss of 2.9 trillion KRW." In the first quarter, KEPCO recorded an operating loss of 6.1776 trillion KRW.

For 2023, sales are projected to increase by 20.2% year-on-year to 85.7 trillion KRW, with an operating loss of 7.7 trillion KRW. Last year's operating loss was 32.6034 trillion KRW, raising concerns about financial soundness, but it is expected to decrease significantly this year.

Researcher Kwon analyzed, "The increase in sales is due to higher electricity sales volume and electricity sales price (assuming electricity sales volume YoY +2.7%, sales price YoY +19.5%). As fuel costs and purchased power costs decrease, the operating loss margin is expected to narrow compared to last year."

Fuel costs are projected to decrease by 22.3% year-on-year to 26.9 trillion KRW, and purchased power costs by 20.0% to 33.5 trillion KRW. This assumes LNG at 1,322,000 KRW per ton and coal at 167,000 KRW per ton.

The average fuel unit price is expected to gradually decline due to energy price stabilization. Based on this, Researcher Kwon suggests that an annual turnaround to profitability could be expected as early as 2024.

He added, "The 2023 nuclear power utilization rate is expected to be in the mid-80% range, which will help reduce fuel costs. Provided that issues like the Russia-Ukraine conflict do not arise, it is anticipated that the government’s goal of securing financial soundness for public enterprises by 2026 will be achievable."

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