Kepco posts losses for third straight quarter

The state-run Korea Electric Power Corporation (Kepco) said Monday that it posted losses in the second quarter due to higher fuel costs and the low operation rate of nuclear reactors.

Net losses reached 918.59 billion won ($809.68 million) on a consolidated basis in the April-June period, compared with a profit of 358.92 billion won a year earlier, the company said in a regulatory filing.

Kepco posted 13.33 trillion won in sales on increased electricity sales, but recorded operating losses of 687.11 billion won as rising oil and coal costs weighed on its profitability.

It was the first time in six years that the state utility firm posted an operating deficit for three consecutive quarters.

“The operating profit turned to losses in the first half of this year despite increased sales of electricity as costs outweighed profits,” Park Hyung-duck, Kepco’s chief financial officer, said in a briefing. “As profits are usually lowest in the second quarter due to seasonal factors, profits should improve in the latter half of this year.”

The company said it expects better earnings in the latter half of this year, as several reactors are set to go online after safety maintenance is completed in the coming months.

The operation rate of nuclear reactors stood at 63 percent in the second quarter, which is expected to rise to 76 percent in the latter half, the company said.

“We will carry out restructuring efforts and push for overseas projects to improve the earnings,” the company said.

Shares of Kepco fell 1.27 percent to 31,150 won on the Seoul bourse. The earnings report was released after the market closing.

Yonhap