Dongseo Power Achieves Three Consecutive Years of Profit... Lowest Debt Ratio Among Power Companies

Contribution to Optimal Fuel Purchasing and REC Sales
Increase in Equity Income and Dividend Revenue from Investee Companies

Korea East-West Power achieved three consecutive years of profit through efficient financial management until last year. This result was achieved by thoroughly reviewing existing businesses to reduce costs and enhancing profitability by cutting fuel costs through a self-developed coal price index.

An East-West Power official stated on the 25th, "Last year, we recorded a net profit of 139.013 billion KRW," adding, "We are the only one among the five state-owned thermal power companies based on separate financial statements to have achieved three consecutive years of profit from 2021 to 2023."

First, East-West Power promoted cost reduction through a thorough review of existing businesses. By improving operational methods through discussions with internal and external experts on the environmental facility performance improvement project at Dangjin, the largest business site, about 26 billion KRW was saved. In Eumseong, where a new liquefied natural gas (LNG) combined power plant is under construction, collaboration with institutions such as Korea Water Resources Corporation reduced construction costs by approximately 38.2 billion KRW.

Exterior view of the headquarters building of Dongseo Power.

East-West Power set a cost reduction target of 227.2 billion KRW for 2023 through financial soundness measures and actively pursued enhancing financial soundness through ▲asset sales ▲investment cost adjustments ▲budget cuts ▲revenue expansion. As a result, it exceeded the target by 337.5 billion KRW, achieving 564.7 billion KRW, which is 249% of the goal. The debt ratio was also the lowest among power generation companies at 90.4%, proving stable financial management capabilities for three consecutive years, according to East-West Power.

Since the surge in fuel costs that began in 2022, East-West Power developed its own coal price forecasting index called EWPCI (EWP Coal Index). An East-West Power official explained, “By utilizing EWPCI for market outlook analysis and price forecasting, we minimized purchases during periods of rising fuel costs and maximized purchases during declines, adjusting purchase timing and volume through period-specific market forecasts. Additionally, by actively mixing suppliers based on market differences by supply country, we saved about 82.8 billion KRW in fuel costs compared to the average calorific unit price of power generation companies through a diversified strategy.”

Furthermore, by strengthening management performance diagnostics to check business soundness and managing debt ratio trends such as borrowings, equity income and dividend income from investee companies also increased compared to the previous year. East-West Power divided its businesses into three categories: excellent, good, and focused management, then established and executed customized management plans. Last year, dividend income increased by 14% year-on-year to 133 billion KRW, and equity income was 99.3 billion KRW, significantly contributing to consolidated net profit.

Along with this, East-West Power stabilized the market by selling excess renewable energy supply certificates (RECs) beyond mandatory amounts during periods of rising spot prices, generating 27 billion KRW in revenue simultaneously. It also diversified funding sources and constructed a portfolio considering currency and maturity interest rate economics, saving 2 billion KRW annually with the lowest interest rate (3.847%) among foreign currency bonds issued by power group companies.

Kim Young-moon, President of East-West Power, said, "In the reality where the energy industry is rapidly changing, as a power generation public enterprise, we have no choice but to continuously innovate and transform. While maintaining financial soundness, we will devote all our capabilities to energy transition to ensure East-West Power continues to grow as a sustainable company."

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