Kepco Fails to Smile Despite Turning a Profit After 10 Quarters... Still 'Revenue < Expenses' (Update)

KEPCO Reports Q3 Operating Profit of 2 Trillion Won 'Temporary Surplus'
Cumulative Sales This Year 65.6865 Trillion Won · Operating Expenses 72.1399 Trillion Won

Korea Electric Power Corporation (KEPCO) recorded an operating profit of approximately 2 trillion won in the third quarter of this year. However, on a cumulative basis for this year, operating expenses such as power purchase costs still exceed sales revenue, resulting in a deficit of 6.45 trillion won for the year. Additionally, concerns over rising international oil prices due to the Israel-Hamas war have increased the likelihood of returning to a deficit in the fourth quarter.

On the 13th, KEPCO announced that its consolidated operating profit for the third quarter was 1.9966 trillion won, marking a return to profitability after 10 quarters.

Sales revenue increased by 23.8% year-on-year to 24.47 trillion won from 19.773 trillion won in the same period last year. Electricity sales revenue rose from 18.4882 trillion won to 23.1641 trillion won during the same period, while operating expenses, including fuel costs and power purchase costs, increased from 27.3039 trillion won to 22.4734 trillion won.

However, looking at the cumulative figures from the first to the third quarter, the company still struggles. The cumulative operating loss for this year stands at 6.4534 trillion won. Although cumulative sales revenue increased by 13.9214 trillion won to 65.6865 trillion won from 51.7651 trillion won in the same period last year, operating expenses reached 72.1399 trillion won.

Compared to the same period last year, the main factors for changes include a 0.3% decrease in electricity sales volume, but a 29.8% increase in sales price per kilowatt-hour (kWh) from 116.4 won to 151.1 won due to tariff hikes, resulting in a 13.8281 trillion won increase in electricity sales revenue. Subsidiaries' fuel costs decreased by 2.6599 trillion won, but power purchase costs from private power producers increased by 267.4 billion won. KEPCO explained, "Although subsidiary power generation decreased due to reduced power demand, power purchases increased due to the entry of new private coal power plants. Also, while fuel costs for subsidiaries decreased by 10.9% due to falling energy prices, power purchase costs through the power market increased by 0.9%."

In the power industry, it is expected that KEPCO will find it difficult to sustain profitability going forward. A KEPCO official stated, "Although operating profit was recorded in the third quarter on a consolidated financial statement basis due to five tariff adjustments and fuel price stabilization since April, the uncertainty of international oil prices and exchange rates caused by the Israel-Hamas war makes the continuation of profitability uncertain. We will do our best to thoroughly and swiftly implement the self-help efforts promised to the public to normalize management."

Meanwhile, KEPCO decided to raise the electricity consumption charge by an average of 10.6 won per kWh for large-volume industrial customers (category E) starting from the 9th. With this increase, KEPCO expects to gain an additional profit of 400 billion won this year and 2.8 trillion won next year.

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