Korea Electric Power Corporation (KEPCO) reported a significant decline in its operating profit for the third quarter of this year, attributing the drop to rising international fuel prices amid the ongoing conflict in the Middle East. The company's profitability has been severely impacted by decreased electricity sales and increased fuel and power purchase costs.
On November 12, KEPCO announced that its consolidated operating profit for the third quarter was 1.6442 trillion won, a 70.9% decrease from 5.6519 trillion won during the same period last year. Revenue also fell by 2.6% to 26.8518 trillion won compared to the previous year. However, the company maintained a profit for the 13th consecutive quarter since the third quarter of 2023.
For the first three quarters of this year, KEPCO's cumulative operating profit reached 6.5569 trillion won, down 43.2% from 11.5414 trillion won in the same period last year. Cumulative revenue was 73.1691 trillion won, a decrease of 0.8%, while net profit fell by 50.4% to 3.6324 trillion won.
The decline in performance was directly influenced by the rise in international fuel prices due to the Middle East conflict. From January to September, the fuel costs for power generation subsidiaries increased by 2.2007 trillion won (14.8%) to 17.267 trillion won compared to the same period last year. The cost of purchasing electricity from private power companies also rose by 903.4 billion won (3.4%) to 27.5097 trillion won.
During the same period, the average price of international thermal coal increased by 24.5%, rising from $105 per ton to $130.7. The price of liquefied natural gas (LNG) also saw a 2.7% increase, leading to a 1.9% rise in the standard market price for electricity (SMP) from 118.2 won per kWh to 120.4 won. The cost of renewable energy certificates (REC) also increased from 2.9 trillion won to 3.7 trillion won.
In contrast, electricity sales performance was weak. From January to September, electricity sales volume decreased by 1.1% to 415.3 TWh compared to 419.9 TWh in the same period last year. The average selling price also fell from 170.4 won per kWh to 169.7 won, resulting in a decrease in electricity sales revenue of 1.1606 trillion won (1.6%).
KEPCO has strengthened its emergency management system, achieving financial improvements amounting to 1.9 trillion won by the end of the third quarter. This includes cost reductions of 1 trillion won, revenue improvements of 300 billion won, and investment cost reductions of 600 billion won.
However, the financial burden remains significant. As of the end of September, KEPCO's consolidated debt stood at 209.6 trillion won, with borrowings reaching 132.8 trillion won. Interest expenses alone for the first nine months of this year totaled 3.2 trillion won.
A KEPCO official stated, "We will maintain cost-cutting measures and our emergency management system in response to the prolonged rise in international energy prices. Based on our financial improvement efforts, we will also accelerate the expansion of the national power grid necessary for the development of artificial intelligence (AI) data centers and advanced industries."
* This article has been translated by AI.
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