KEPCO turns to profit in Q1 on rate hikes, lower energy costs

The state-run Korea Electric Power Corp. (KEPCO) said Friday it has turned to profit in the first quarter from a year earlier on the back of lower global energy prices.

The company said its first-quarter net income came to 595.9 billion won (US$435.3 million), shifting from a loss of 4.91 trillion won a year earlier.

Operating income for the January-March period was 1.29 trillion, compared with a loss of 6.17 trillion won a year ago, the company said in a regulatory filing. Sales rose 7.9 percent to 23.29 trillion won.

It marked three consecutive quarters for KEPCO to post an operating profit.

KEPCO attributed the improved operating profit to a 20.8 percent, or 5.7 trillion won, decrease in operating costs.

In detail, the company spent 6.1 trillion won on purchasing resources and 9.2 trillion won on buying electricity from private power generation companies, which represented decreases of 32.2 percent and 24.2 percent, respectively, over the period.

The company added its earnings also improved as it raised electricity fees three times in 2023 by 13.1 won per kilowatt hour (kWh) in the first quarter, 8 won in the second quarter and 10.6 won in the fourth quarter.

KEPCO, however, said that the company anticipates uncertainties down the road due to the prolonged war between Russia and Ukraine, coupled with the crisis in the Middle East, which may lead to financial exchange fluctuations.

“KEPCO plans to implement the self-rescue measures it announced earlier in response to the changing business environment. We will collaborate with the government to discuss various strategies to address accumulated losses,” the company said.

The company has been implementing various self-rescue measures, including restructuring overseas operations, selling properties and offering voluntary retirement programs.

KEPCO earlier posted a combined loss of 43 trillion won from 2021 to 2023, as the company had not been able to raise electricity bills enough to cover high fuel costs amid the COVID-19 pandemic and high inflation.

Shares of KEPCO closed at 20,600 won on the main bourse, down 5.5 percent from a day earlier. The first-quarter report was released during the session.