On May 13, KEPCO announced that its operating profit increased by 0.7% compared to the same period last year, reaching 3.7842 trillion won, while its net profit rose by 6.7% to 2.519 trillion won. This marks the highest operating profit in the company's history and continues an 11-quarter streak of profitability since the third quarter of 2023.
The increase in profits is largely attributed to a decline in the standard market price (SMP) of electricity. The average SMP for the first quarter was 107.1 won per kilowatt-hour, down 7.4% from a year earlier, while electricity sales revenue increased by 121 billion won (0.1%).
Additionally, KEPCO reduced costs by 400 billion won through a strict management system and financial stabilization plans. The company saved approximately 300 billion won in power purchase costs by easing transmission constraints and expanding low-cost generation. An enhanced asset management system utilizing artificial intelligence also contributed to around 100 billion won in savings on maintenance costs.
As a result, some of the financial burdens accumulated due to soaring fuel costs during the Russia-Ukraine war have been alleviated. The cumulative operating loss, which reached 47.8 trillion won in 2023, has been reduced to 34 trillion won as of the first quarter of this year.
However, KEPCO still faces significant challenges, with debts totaling 206 trillion won and borrowings amounting to 128 trillion won. This situation results in daily interest expenses of 11.4 billion won.
Looking ahead, the second quarter poses greater challenges. There is a high likelihood of increased international fuel prices and exchange rates due to the ongoing conflict in the Middle East. International oil prices, which were around $64.9 per barrel before the conflict, surged to $105.7 last month. The won-dollar exchange rate rose from 1,453.3 won to 1,487.4 won during the same period.
A KEPCO official stated, "The impact of the Middle East conflict does not appear to have been reflected in the first-quarter results, but it is expected to affect the second quarter. While restoring financial stability is urgent, the conflict may delay the normalization of our finances due to its lagging effects."
The official added, "We will continue to implement internal and external measures to improve the power market system and enhance maintenance standards to reduce costs effectively."
* This article has been translated by AI.
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