Kepco Posts Profit for 4 Consecutive Quarters...Operating Profit Decreases from 2 Trillion to 1.2 Trillion Won (Update)

KEPCO Reports Operating Profit of 1.2 Trillion KRW in Q2, 2.5 Trillion KRW Surplus in H1
Separate Basis Shows Return to Deficit... "Steeper Decline in Electricity Sales Revenue Impact"

Korea Electric Power Corporation (KEPCO) recorded an operating profit of 1.2 trillion won in the second quarter of this year, achieving a surplus of 2.5 trillion won in the first half of the year. On a quarterly basis, KEPCO has posted profits for four consecutive quarters starting from the third quarter of last year.

KEPCO announced on the 8th that its consolidated first-half financial results showed sales of 43.7664 trillion won, operating expenses of 41.2168 trillion won, and an operating profit of 2.5496 trillion won.

A KEPCO official stated, "Operating profit increased by 10.9996 trillion won compared to the same period last year," adding, "Sales increased by 2.5499 trillion won due to tariff adjustments, while operating expenses decreased by 8.4497 trillion won due to reductions in fuel costs and power purchase costs."

Based on consolidated financial statements including subsidiaries such as power generation companies, KEPCO recorded operating profits for four consecutive quarters in 2023 due to three tariff hikes and fuel price stabilization. However, the quarterly operating profit amounts decreased from 2 trillion won in Q3 last year to 1.09 trillion won in Q4, 1.3 trillion won in Q1 this year, and 1.2 trillion won in Q2.

In particular, based on separate financial statements excluding subsidiaries, KEPCO recorded an operating loss of 100 billion won in the second quarter of this year, turning to a deficit for the first time in three quarters. A KEPCO official explained, "The second quarter (April to June) is an off-season when electricity sales revenue decreases, dropping from 22.4 trillion won in Q1 to 19.8 trillion won, a decrease of 2.6 trillion won. However, the reduction in power purchase costs, which is the cost of purchasing electricity from power generation subsidiaries, was only 1.4 trillion won, resulting in a deficit on a separate basis."

KEPCO expressed concerns that the future business environment will not be easy. A KEPCO official said, "Due to the ongoing Middle East conflict and high exchange rates, energy prices are expected to rise, leading to increases in fuel and power purchase costs. We will thoroughly and swiftly implement the self-help efforts promised to the public and work with the government on various measures to reduce accumulated deficits through cost reductions in electricity tariffs, including lowering power purchase costs."