Korea Electric Power Corp. (KEPCO) posted 7.5 trillion won in losses in the third quarter of this year, bringing cumulative losses for the first nine months of the year to almost 22 trillion won.
KEPCO said on Nov. 11 the power company logged 21,834.2 billion won in the January-September period losses on a consolidated basis, the worse-ever.
KEPCO chalked up 7,786.9 billion won and 6,516.4 billion won in losses in the first and second quarter, respectively, and the power company saw Q3 losses snowball to 7,530.9 billion won, over 1 trillion won more than the previous quarter. Q3 losses are the worst-ever in the same quarter.
KEPCO saw sales increase 6,618.1 billion won to 51,765.1 billion won on the back of rising electricity sales and rate hikes during the first nine months of the year, but the power company saw operational expenses soar 27,328.3 billion to 73,599.3 billion won during the period.
Specifically, KEPCO saw electricity revenues soar to 47,956.8 billion won during the January-September period, a 12.8 percent year-on-year surge or a jump of 5,438.6 billion won on the back of a 3.7 percent rise in the manufacturing industry’s average operation rate and a 3.7 percent increase in sale unit price during the period.
But expenses jumped in a greater margin, including a surge of 10,810.3 billion won in fuel costs paid to subsidiaries and a jump of 15,956.8 billion won in purchase prices from independent power plants, KEPCO said.
Other business expenses surged 1,445.1 billion won after a rise in depreciation costs coupled with the acquisition of power generation and transmission facilities.
As KEPCO is predicted to continue to see losses in the fourth quarter of the year, chances are high that the power company will see cumulative losses approach 30 trillion won during the whole of the year.
The power company saw fuel costs and power purchase costs soar due to international energy price hikes, but electricity prices have seen a corresponding increase.
The losses were attributable to rising power generation amounts, caused by increasing demand, and fuel prices jumping more than twice the system marginal price (SMP), caused by a surge in fuel prices such as liquefied natural gas and coal.
KEPCO aims to improve financial soundness worth 14.3 trillion won in the next five years through disposal of non-essential assets, readjusting the timing of investment projects and retrenchment related to power supply management as steps to cope with large amounts of cumulative losses, caused by a global energy crisis.
