KEPCO posts modest Q1 gain, flags fuel price risks ahead

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

Korea Electric Power Corp. (KEPCO) reported a modest increase in first-quarter earnings on Wednesday, but warned that the impact of the Middle East crisis and rising global fuel prices could weigh on results from the second quarter onward.

According to the electric utility company, first-quarter revenue rose 0.7 percent year-on-year to about 24.4 trillion won ($16.4 billion). Operating profit edged up 0.8 percent to 3.8 trillion won, while net profit climbed 6.7 percent to 2.5 trillion won.

KEPCO said operating profit rose despite weaker sales thanks to its emergency cost‑cutting drive, including 300 billion won in savings on purchased power and 100 billion won from efficiency gains in maintenance spending through regulatory changes and wider use of artificial intelligence (AI)‑based asset management systems.

The company said the first-quarter performance reflects a time lag in the impact of the late‑February spike in global crude and liquefied natural gas prices triggered by the Middle East crisis, adding that fuel cost volatility has had a limited effect on earnings so far.

However, it expects the impact on earnings and financing costs to emerge from the second quarter onward.

Electricity sales revenue, which remained broadly in line with a year earlier, edged up 0.1 percent to 23.22 trillion won. Fuel costs at KEPCO’s power generation subsidiaries increased 4.1 percent from a year earlier, partly due to higher coal prices and reduced nuclear power generation during maintenance periods.

Despite the quarterly profit, the company remains heavily leveraged, carrying 206.4 trillion won in total debt and 128.2 trillion won in borrowings, resulting in daily interest expenses of about 11.4 billion won.