Korea Electric Power Corp., (KEPCO) struggling with 200 trillion won in debts, managed to post about 2 trillion won in operating profit in the 3rd quarter of this year, for the first time in 10 quarters.
The Q3 operating profit is attributable to electricity rate hikes and stabilizing of international crude oil prices.
But the operating profit is predicted to be short-lived as international crude oil prices and the dollar to won exchange rate are feared to rise in the wake of the war between Israel and Hamas.
In a consolidated financial statement for the 3rd quarter of the year, KEPCO posted 1,996.6 billion won in operating profit, turning around from 7,530.9 billion in operating loss in the same period of the previous year, provisional figures showed.
KEPCO chalked up 24.47 trillion won in Q3 sales, a 23.8 year-on-year jump.
The power company posted 833.3 billion won in net profit, a departure from 5,884.2 billion won net loss in the same period of the previous year.
KEPCO’s operating profit in Q3 is owed to a succession of electricity rate raises since last year and the effects of stabilizing international crude oil prices.
KEPCO saw electricity sale price unit in the first nine months of the year jump 29.8 percent year-on-year and electricity sale revenues jump 28.8 percent compared to the same period of last year.
On the other hand, KEPCO’s subsidiary power companies saw fuel costs plunge about 2.66 trillion won on the back of declining bituminous coal prices during the same period.
KEPCO said the power company chalked up an operating profit in the third quarter of the year on a consolidated basis on the back of electricity rate hikes on five occasions between April 2022 and Q3 2023, and stabilizing fuel costs.
But it’s unclear if the power company can continue the operating profit in the wake of the uncertainties caused by the war between Israel and Hamas and foreign currency exchange rates.
Securities sources said KEPCO is forecast to post an operating loss of about 600 billion won in the fourth quarter of the year, due to rising crude oil prices and foreign currency rates.
KEPCO logged about 2 trillion won in operating profit in Q3, but that was quite insufficient to ease the power company’s cumulative losses.
The power company sustained 38.5 trillion won in operating losses between 2021 and 2022 since international crude oil prices surged before and after Russia’s invasion into Ukraine and KEPCO sold electricity below unit prices.
KEPCO logged about 6.5 trillion won in operating profit so far this year, and the figure brought to about 45 trillion won in cumulative losses.
As KEPCO is feared to issue bonds to pay interest due to declining reserve funds, the government on Nov. 9 raised industrial electricity rates for large-sized companies by an average of 10.6 won per kWh.