Kepco posts operating loss, high fuel prices continue to bite

A pedestrian walks past Korea Electric Power Corporation Seoul office building in central Seoul. [NEWS1]

Korea Electric Power Corporation (Kepco) posted yet another operating loss of 2.27 trillion won ($1.72 billion) for the second quarter as the country’s sole power distributor continues to struggle with high fuel costs despite electricity rate hikes in 2023.

Its total deficits since 2021 amount to some 47 trillion won, as the debt-ridden state-run utility continues to stay in the red for a ninth consecutive quarter.

The operating figure is worse than the analyst forecast of 2.11 trillion won in losses compiled by market tracker FnGuide.

Fuel price hikes in 2022 continue to weigh on the company’s performance. However, the size of the loss shrunk compared to the 6.52 trillion won figure during the same period last year and the first quarter's 6.18 trillion won loss, thanks to higher electricity rates and stabilizing fuel prices, according to Kepco.

Revenue came in at 19.62 trillion won, up 26.4 percent on year, falling slightly short of the market expectation of 19.75 trillion won.

The government has raised the electricity rate five times since April 2022, pushing up electricity prices by 40.4 won per kilowatt-hour, or 39.6 percent, to date.

“Operating losses in the second quarter are significantly lower than in first quarter due to rate adjustments and fuel price stabilization, but the accumulated deficits in the first half of the year are likely to result in a large reduction in reserves by the end of this year and limited financing moving forward,” Kepco said in a release Friday, promising to cut down costs to overcome the ongoing financial crisis.

In May, Kepco announced a 25-trillion-won restructuring plan to restore its fiscal soundness that will run through 2026. The plan includes cutting employee salaries and unloading assets.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]