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 by posting an operating profit of approximately 3.7 trillion won in the first quarter of this year. However, concerns have been raised that profitability and financial burdens could increase again from the second quarter, as the impact of surging international oil and LNG prices due to the Middle East war has not yet been reflected.

On May 13, KEPCO announced that its consolidated sales for the first quarter of this year reached 24.3985 trillion won, with an operating profit of 3.7842 trillion won. Sales rose by 0.7% and operating profit increased by 0.8% compared to the same period last year. Net profit for the quarter grew by 6.7% to 2.519 trillion won.

KEPCO stated, “The spike in international oil and LNG prices caused by the Middle East war at the end of February has not yet been reflected in our first-quarter results,” adding, “We expect the impact of the Middle East war to affect our performance and financing with a time lag.”

In fact, 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 because of preventive maintenance, which was offset by an increase in coal power generation, as well as rising coal prices. On the other hand, the cost of purchasing power from private generators decreased by 36.5 billion won due to a decline in the System Marginal Price (SMP).

Although electricity sales volume decreased by 0.9% year-on-year to 139.7 TWh, the unit sales price increased by 0.5% to 170.4 won per kWh.

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

However, the financial burden remains significant. On a consolidated basis, total debt reached 206.4 trillion won, while borrowings amounted to 128.2 trillion won. The average daily interest expense alone stood at about 11.4 billion won.

KEPCO stated, “Restoring financial soundness is an urgent task,” and warned that “the impact of rising international fuel prices and exchange rates due to the Middle East war will start to be reflected from the second quarter, potentially slowing the pace of financial normalization.”

Before the war, the average international oil price was around $64.9 per barrel, but after the outbreak, it soared to an average of $128.5 in March and remained at about $105.7 in April. The exchange rate also rose from 1,453.3 won to the dollar to the 1,487 won range during the same period.

KEPCO plans to continue its efforts to reduce costs and improve its financial position by implementing seasonal and time-based electricity pricing and conducting energy-saving campaigns going forward.

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