KOGAS Reports 34% Drop in Operating Profit for H1... Accounts Receivable Increases by KRW 3.66 Trillion

Korea Gas Corporation's operating profit in the first half of this year decreased by nearly 35% compared to the same period last year. Accounts receivable increased by more than 3.65 trillion KRW in the first half alone.

According to Gas Corporation on the 11th, operating profit in the first half of this year recorded 793.4 billion KRW, down 408.6 billion KRW (about 34%) from the same period last year.

A Gas Corporation official explained, "The decrease in operating profit is mainly due to the adjustment of the tariff calculation method, which reflected the settlement of revenues or expenses incurred in previous years, and the expansion of gas tariff support for vulnerable groups."

Gas Corporation supplies LNG raw material costs at cost without separate profit, but operates on a system where any temporary profit or loss is settled in the next quarter. Accordingly, the raw material cost profit and loss incurred in 2022 was deducted and reflected in the operating profit for the first half of 2023 (295.2 billion KRW).

Also, due to the expansion of urban gas tariff support for vulnerable groups during the winter season (December to March) (from the existing 96,000 KRW to the adjusted 592,000 KRW), a temporary operating profit decrease effect of 196.2 billion KRW occurred for Gas Corporation.

Sales increased by 14% compared to the same period last year, recording 26.0575 trillion KRW. This is because, although sales volume decreased by 1.98 million tons (about 10%) compared to the same period last year due to factors such as the rise in average winter temperature, the average selling price increased by 5.18 KRW/MJ (about 27%) due to rising oil prices and exchange rates.

The market interest rate in the first half of this year rose compared to the same period last year, and borrowings increased due to the increase in accounts receivable, resulting in net interest expenses of 783.5 billion KRW, significantly higher than last year's 356 billion KRW.

With operating profit decreasing and non-operating losses also increasing sharply, net profit for the first half decreased to 72.7 billion KRW.

Accounts receivable for residential urban gas in the first half increased by 3.6579 trillion KRW compared to the end of last year, reaching about 12.2435 trillion KRW. Although the increase in accounts receivable slowed due to the stabilization of international energy prices, residential urban gas is still supplied below cost.

A Gas Corporation official said, "This year, operating profit significantly decreased due to overlapping factors such as policy factors including expanded support for vulnerable groups and adjustment of tariff calculation methods. However, since the mid- to long-term financial management plan is being implemented without delay, performance improvement is expected from next year."

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