KEPCO President Cho Hwan-eik (Photo:KEPCO)

Korea Electric Power Corp. (KEPCO) announced it chalked up 58.957 trillion won in sales, 11.346 trillion won in operating profit, and 13.413 trillion in net profit in 2015, representing a 2.6 percent rise, a 96.1 percent surge and a 379.2 percent jump over the previous year, respectively. 

A public filing, released by KEPCO on Feb. 4, showed that KEPCO posted 14.692 trillion won in sales, 2.678 trillion won in operating profit and 1.572 trillion won in net profit in the fourth quarter of last year, representing a 1.4 percent decline, a 208 percent surge and a 229.6 percent jump over the same period of 2014, respectively.

KEPCO said a surge in operating profit was attributable to a drop in fuel costs and electricity purchase prices as well as proceeds stemming from the sale of the KEPCO headquarters site in Samseong-dong, Seoul to Hyundai Motor Group.

“Korea will have to create new industries that will feed the nation and drive the national economy. There are unlimited potential in the energy field,” said KEPCO President Cho Hwan-eik in an interview with a vernacular economic daily. “That is the reason I’ve put on a mission after I was reelected as KEPCO president that is KEPCO’s innovation.” President Cho was reelected for one more year after reaching the end of his three-year term last December.” 

His new term will last until Dec. 16, 2016. Under law, public entity executives may have their term renewed every year following an initial three-year term.

Cho is not the first KEPCO CEO to be reelected. KEPCO’s eighth president, Park Jung-ki, was reelected once, serving from 1983 to 1987. KEPCO’s 11th president, Lee Jong-hoon, was reelected twice, serving from 1993 to 1998. 

KEPCO President Cho’s reelection was owed to his track record in making excellent business decisions. Cho succeeded in bringing KEPCO back into profit territory one year after he took office in 2013, which industry watchers say is a significant achievement.

KEPCO President Cho disclosed his determination to build an ecosystem of a “sharing economy” in which the state and local communities work hand in hand. 

Cho issued his 2016 New Year’s message in which he revealed his management phrase “bohapdaehwa,” which is a Chinese saying that means “the building of a grand harmony with one mind.” 

Acknowledging that KEPCO, which has made a fresh start at the Bitgaram, will have to overcome challenges and difficulties with cooperation and harmony, Cho stressed the need for building a “sharing economy” between the state and local communities.

“KEPCO, with a 118-year history, needs to be upgraded in keeping with a shift in the paradigm of the global energy industry following the inauguration of the Post 2020 climate change regime in Paris and the relocation of KEPCO headquarters,” he said. 

“New energy markets are areas in which the private sector finds it hard to tap since they are required to take a long time to recoup investments, so such public entities as KEPCO should be the first to make investments so that the private sector could feed on the markets,” Cho said. For instance, he said, as KEPCO set up an EV charging station on Jeju Island, Hyundai Motor began to produce electric vehicles and EV automotive part makers have sprung up. Creating new markets and nurturing new technologies are a kind of innovation KEPCO hits the accelerator, he added. 

The post-2020 climate change pact, agreed at the COP-21 Conference in Paris last December, calls for each country to reduce greenhouse gas emissions, KEPCO President Cho said.  Creating new and renewable energies, elevating energy efficiency and carbon capture and storage technologies to restrict greenhouse gas emissions will become global trends, he added. Korea lags behind other countries in the new and renewable energy sectors, and the nation’s site locations for photovoltaic power and wind power are not favorable, said Cho, adding that on the other hand, Korea and KEPCO are making feats in the energy efficiency segment, the world’s highest levels. 

Elevating energy efficiency is not the only reduction of power losses between power plants and consumers, but it also includes smart grids, a combination of energy industry and ICT, micro grids, energy self-sufficiency islands, energy storage systems, EV business, and large-capacity batteries, he noted. 

KEPCO President Cho said on Jan. 3 that KEPCO plans to use much of the company’s largest-ever net profit in 2015 to lower its debt ratio. 

“KEPCO’s rise in net profit is owed to a decline in prices of such raw materials as crude oil; proceeds from the disposing of KEPCO headquarters in Samseong-dong, Seoul; the improving of business performances; and it is reasonable to use the proceeds to pay for its debt,” he said.  

Some pundits say that public pressure to lower electricity rates is expected to mount. But the KEPCO president made it clear that he plans to use the net profit to improve its financial structure. 

President Cho said the core of the government’s policy to normalize public entities is about reducing their debts, which may lead to a reduction in people’s financial burden in the mid- to long-run.