Korea Electric Power remains in red in Q2

State-run Korea Electric Power Corp. (KEPCO) said Friday its earnings stayed in the red in the second quarter, amid higher production costs in the face of the Russia-Ukraine war.

Net losses came to 1.9 trillion (US$1.43 billion) won in the April-June period, narrowing from a 4.83 trillion-won loss tallied a year earlier, the company said in a regulatory filing.

Operating losses came to 2.27 trillion won in the second quarter, also improving from a loss of 6.51 trillion on-year, it added. It nevertheless marked nine consecutive quarters where KEPCO has posted an operating loss.

Sales reached 19.62 trillion won in the April-June period, up 26.4 percent on-year.

The operating loss came in line with the estimate of 2.1 trillion won projected by Yonhap Infomax, the financial news arm of Yonhap News Agency.

“Due to the adjusted rates and stabilized fuel costs, the operating loss in the second quarter narrowed from a three-month period earlier,” the company said in a statement.

Over the first half, KEPCO said its sales from electricity sales came to 41.2 trillion won, up 28.8 percent on-year on the back of higher rates.

The company, meanwhile, spent 15.1 trillion won on purchasing resources and 21 trillion won on purchasing electricity from private power generation companies.

“Under close coordination with the government, we will seek to implement an electricity pricing system based on the production costs, and make efforts to ease financial risks,” it added.

In May, KEPCO said it will sell a major building in Seoul and freeze the wages of ranking employees as part of its efforts to improve financial soundness and achieve management innovation over mounting losses, with the goal of saving more than 25 trillion won by 2026.

The government jacked up electricity rates by 5.3 percent for the second quarter, or by 8 won per kWh, following a 13.1 won increase per kWh in the first quarter due to high global energy costs and mounting losses.

The rate, however, was frozen for the July-September period.

Shares of KEPCO closed at 18,960 won on the main bourse, down 0.37 percent from the previous session. The earnings results were released during the market hour.