KEPCO Q1 net losses narrow on electricity rate hikes

The state-run Korea Electric Power Corp. (KEPCO) said Friday its net losses narrowed in the first quarter from a year earlier on the back of the government’s electricity rate hikes for the first quarter and milder increases in the global energy prices.

Net losses fell to 4.91 trillion won (US$3.6 billion) in the January-March period from 5.92 trillion won during the same period last year, KEPCO said in a regulatory filing.

The government raised electricity rates for the first quarter by 13.1 won per kilowatt hour, a move that helped the company narrow its net losses.

Last year, the government was not able to raise the energy rates enough to cover soaring costs amid high inflation and growing public burdens over the COVID-19 pandemic and an economic slowdown.

Next week, the government plans to announce a decision on the possible electricity rate increase for the second quarter, which has been postponed for more than a month.

KEPCO said its operating losses also dropped to 6.18 trillion won in the first quarter from 7.78 trillion won during the same period of last year, extending the losing streak to the eighth quarter in a row. In 2022, the company logged a record high operating loss of 32.63 trillion won, more than quadruple from a year earlier.

Sales jumped 31.2 percent on-year to 21.59 trillion won in the January-March period.

The company said its operating costs rose 14.5 percent to 27.77 trillion won on high fuel costs and growing expenses for electricity purchases.

In the wake of the snowballing losses, KEPCO came up with a set of self-rescue measures earlier in the day, including property sales and freezing wages of employees, which would save 25.7 trillion won over the next five years.

Also Friday, KEPCO President and CEO Cheong Seung-il offered to quit, taking responsibility for the situation.