KEPCO Posts Q1 Operating Profit of 3.8 Trillion Won, Up 0.8% YoY... "Middle East War Impact Expected from Q2"

Sales Reach 24.4 Trillion Won, Up 0.7% Year-on-Year

Liabilities Total 206 Trillion Won, Daily Interest Costs Remain at 11.4 Billion Won

Korea Electric Power Corporation (KEPCO) continued its streak of profitability in the first quarter of this year, posting an operating profit of approximately 3.7 trillion won. However, concerns have been raised that, as the impact of soaring international oil and LNG prices due to the Middle East war has yet to be reflected, profitability and financial burdens may increase again from the second quarter onward.

On May 13, KEPCO announced that, on a consolidated basis for the first quarter of this year, it recorded sales of 24.3985 trillion won and an operating profit of 3.7842 trillion won. Sales increased by 0.7% and operating profit by 0.8% compared to the same period last year. Net profit was 2.519 trillion won, up 6.7% year-on-year.

KEPCO explained, "The surge in international oil and LNG prices caused by the Middle East war at the end of February has not yet affected first-quarter results," adding, "We expect the impact of the Middle East war to affect our performance and financing with a time lag going forward."

In reality, fuel costs increased by 207.7 billion won (4.1%) compared to the same period last year. This was due to a decrease in nuclear power generation, owing to preventive maintenance, being offset by increased coal-fired power generation, as well as higher bituminous coal prices. In contrast, the purchase cost of power from private generators fell by 36.5 billion won due to a decline in the system marginal price (SMP).

Electricity sales volume was 139.7 TWh, down 0.9% year-on-year, but the average selling price per kWh rose by 0.5% to 170.4 won.

KEPCO emphasized that it achieved cost savings through the implementation of its emergency management system and financial soundness improvement plan. The company reduced power purchase costs by 300 billion won through easing transmission constraints and expanding low-cost power generation, and also cut maintenance costs by upgrading its AI-based Asset Management System (AMS).

Nonetheless, financial burdens remain significant. On a consolidated basis, total liabilities stood at 206.4 trillion won and borrowings at 128.2 trillion won. Average daily interest expenses amounted to 11.4 billion won.

KEPCO stated, "Restoring financial stability is an urgent issue," and warned, "As the impact of rising international fuel prices and exchange rates due to the Middle East war begins to be reflected from the second quarter, this could slow the pace of financial normalization."

The price of international crude oil, which was at 64.9 dollars per barrel before the war, surged to an average of 128.5 dollars in March following the outbreak, and remained at 105.7 dollars in April. Over the same period, the exchange rate also rose from 1,453.3 won per dollar to around 1,487 won.

KEPCO plans to continue its cost-saving and financial improvement efforts by introducing seasonal and time-of-use electricity tariffs and promoting energy conservation campaigns in the future.

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