KEPCO to pay dividend for 1st time in 4 years

Headquarters of Korea Electric Power Corp. in Naju, South Jeolla Province / Yonhap

Korea Electric Power Corp. (KEPCO) said Friday that it will resume dividend payments for the first time in four years, driven by strong earnings performance in 2024. However, concerns persist that the state utility should prioritize financial recovery amid its snowballing debt.

KEPCO said its consolidated operating profit reached 8.35 trillion won ($5.7 billion) for 2024, marking the first profit in four years, with revenue amounting to 93 trillion won. The state utility's strong recovery was fueled by electricity rate hikes and lower raw material costs.

A KEPCO official added, "71 percent of last year's profit improvement was driven by KEPCO’s rigorous self-reform efforts, including power market system improvements and enhanced operational efficiency."

Building on this strong performance, KEPCO’s board has decided to resume dividend payments in March for the first time in four years. The dividend per share is set at 214 won, yielding 1 percent based on the stock price. Since the amount is small, the market places more significance on the resumption of dividends than the payout itself.

The firm's move aligns with similar decisions by Korea Gas Corp. and Korea District Heating Corp., which are resuming dividends this year for the first time since 2022.

The government says that these dividends are intended as a positive investment signal for state-owned enterprise shareholders, in line with the Corporate Value-up Program.

However, the problem is that KEPCO is still considered far from full financial recovery. As of September 2024, its debt stood at 202.45 trillion won, with interest expenses exceeding 3.42 trillion won per year.

"At this stage, the most urgent priority is to resolve the financial crisis as quickly as possible," an industry official said. "Accelerating the reduction of the cumulative deficit through rate hikes would allow KEPCO to formulate plans to enhance shareholder value, leading to constituent dividend distributions and potentially higher payouts."