Seoul: The state-run Korea Electric Power Corp. (KEPCO) announced on Thursday that its operating profit for the third quarter soared to an unprecedented quarterly high of over 5.6 trillion won (US$3.8 billion). This significant increase followed last year's hike in electricity rates for industrial use and the recent stabilization of international energy prices.
According to Yonhap News Agency, KEPCO's operating profit for the July-September period reached 5.65 trillion won, marking a 66.4 percent increase from 3.39 trillion won in the same period the previous year. Additionally, the company's sales climbed 5.6 percent year-on-year to a record high of 27.57 trillion won, as stated in its regulatory filing. The net profit surged 101.6 percent to 3.79 trillion won, surpassing market expectations. Analysts had predicted a net profit of 3.46 trillion won, based on a survey conducted by Yonhap Infomax, the financial data firm of Yonhap News Agency.
KEPCO reported its ninth consecutive quarter of operating profit, attributing the robust performance to its ongoing efforts to enhance fiscal health. This includes a 9.7 percent increase in electricity rates for industrial use in October of the previous year and the stabilization of global energy prices. Revenue from electricity sales grew 5.5 percent year-on-year to 26.7 trillion won, largely driven by the rise in sale prices, according to KEPCO.
Despite the solid third-quarter performance, KEPCO still faces cumulative operating losses of approximately 23.1 trillion won, recovering from a combined 43 trillion won in operating losses from 2021 to 2023. The company had been forced to sell electricity below cost amid a spike in energy prices caused by the Russia-Ukraine war and other geopolitical risks. As of the end of June, KEPCO's accumulated debt stood at 206.2 trillion won.
In a press release, KEPCO emphasized the necessity of improving its financial structure to secure the significant investment resources required for expanding the power grid. This expansion is crucial for providing a stable electricity supply to future core industries such as artificial intelligence (AI) and advanced manufacturing. The "energy expressway" initiative of the Lee Jae Myung administration refers to a government plan to construct high-voltage direct current (HVDC) infrastructure across the nation. HVDC is a next-generation power technology that reduces inefficiencies in long-distance power transmissions and aids in the integration of renewable energy from various sources.
KEPCO plans to collaborate closely with the government to ensure the timely construction of the national power grid, which serves as the backbone of the country's envisioned energy expressway and AI infrastructure. The company aims to strengthen its financial soundness through measures such as the normalization of electricity bills and the reduction of power purchase costs.