Korea Hydro & Nuclear Power (KHNP) and the five major power companies reported mixed results for the first half of the year. KHNP saw its operating profit increase by nearly 30% despite a decline in revenue, while the five power companies collectively faced an operating loss exceeding 180 billion won.
According to the Financial Supervisory Service's electronic disclosure system (DART), KHNP's consolidated operating profit for the first half of this year reached 3.0897 trillion won, a 28.8% increase from 2.3982 trillion won during the same period last year. The net profit for the first half also rose by 30.5%, from 1.556 trillion won to 2.031 trillion won. However, revenue decreased by 0.4% to 8.2398 trillion won.
The significant increase in profit despite lower revenue is largely attributed to reduced costs. KHNP's cost of sales dropped from 5.735 trillion won in the first half of last year to 5.020 trillion won this year, a decrease of approximately 12.5%. Cumulative electricity sales revenue for the first half was 7.7486 trillion won, with an average sales price of 96.47 won per kWh. The total power generation was 84,473 GWh, accounting for 29.45% of the country's total generation.
In contrast, the five major power companies—Namhung, Chungbuk, Seobuk, Nambu, and Dongseo—reported a combined operating loss of 182.8 billion won for the first half. This marks a significant turnaround from an operating profit of 610.6 billion won in the same period last year. Although their combined revenue increased by 3.1% from 13.4388 trillion won to 13.8616 trillion won, this did not translate into improved profitability. The combined net loss also reached 201.8 billion won, a stark contrast to the 513.7 billion won net profit recorded last year.
Individual company performances were mostly disappointing. Namhung Power transitioned from an operating profit of 170.6 billion won last year to a loss of 63.6 billion won this year. Seobuk Power also shifted from an operating profit of 76.1 billion won to a loss of 78.1 billion won, while Chungbuk Power fell from a profit of 23.9 billion won to a loss of 139.3 billion won.
Even Nambu and Dongseo, which managed to remain profitable, saw significant declines in their earnings. Nambu Power's operating profit for the first half was 12.4 billion won, down 76.8% from 53.4 billion won last year, while Dongseo Power's profit fell by 70.1% from 286.5 billion won to 85.7 billion won. Notably, Nambu Power recorded an operating loss of 114.7 billion won in the second quarter, erasing most of the profits earned in the first quarter.
The decline in profitability for the five power companies can be attributed to rising costs and falling electricity sales prices. Dongseo Power's revenue increased by 13.9% compared to last year, but its cost of sales surged by about 27%. Seobuk Power also experienced a 14.7% increase in revenue, while its cost of sales rose by 21.7%. Chungbuk Power's cost of sales increased by 7.8%, resulting in a shift from a gross profit of 108.1 billion won last year to a gross loss of 55.6 billion won this year.
Rising fuel prices and declining electricity sales prices have added to the burden. Seobuk Power reported an average purchase price for bituminous coal of 190,201.8 won per ton in the first half of this year, up from an average of 170,892 won per ton in 2025. Nambu Power's average system marginal price (SMP) for the first half was 112.30 won per kWh, down from 118.89 won last year, while the average sales price fell from 175.84 won to 149.65 won.
Amid these trends in costs and sales prices, the profitability gap between the five power companies and KHNP has become increasingly evident. The combined operating profit of the six power companies, including KHNP, for the first half was approximately 2.9069 trillion won, a 3.4% decrease from the same period last year. While the operating losses of the five power companies worsened by about 793.5 billion won compared to last year, KHNP's operating profit increased by approximately 691.5 billion won, significantly offsetting the losses.
* This article has been translated by AI.
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