SEOUL, Aug. 12 (Korea Bizwire) — The state-run Korea Electric Power Corp. saw its net loss widen sharply in the second quarter of the year on frozen electricity rates amid higher fuel costs.
The consolidated net loss came to 4.84 trillion won (US$3.7 billion) in the April-June period, compared with a loss of 661.97 billion won a year earlier, the company said in a regulatory filing.
Its operating loss came to 6.51 trillion won, compared with a loss of 752.9 billion won a year earlier. Yet sales rose 14.2 percent to 15.53 trillion won.
The operating loss was 20.1 percent higher than the median estimate in a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
In the first half of the year, KEPCO logged a net loss of 10.76 trillion won, compared with a loss of 549.57 billion won the previous year.
Sales rose 11.5 percent on-year to 31.99 trillion won, with its operating loss coming to 14.3 trillion won, compared with red ink of 187.3 billion won.
The second-quarter loss came as KEPCO was forced to put the lid on electricity rates amid government measures to curb surging consumer prices.
South Korea is struggling to rein in soaring consumer prices, which spiked 6.3 percent in July from a year earlier, the fastest pace in almost 24 years.
In a bid to help turn itself around, KEPCO hiked the adjusted unit fuel cost — a key part of the country’s electricity rates — by a mere 5 won ($0.004) per kilowatt hour for the July-September period.
After announcing the second-quarter results, KEPCO urged the government to allow the company to jack up utility rates to tackle its snowballing losses.
However, analysts said KEPCO may find it difficult to raise electricity prices further down the road, given the country’s high consumer inflation.
Indeed, Lee Chang-yang, minister of trade, industry and energy, told reporters Monday that any power rate hikes should be minimized in light of the impact of galloping inflation on people’s lives.
KEPCO’s snowballing losses have sparked concerns over its financial soundness, prompting the state utility company to seek self-rescue measures, including asset sales.
In a meeting with reporters in late June, Prime Minister Han Duck-soo called for drastic reform of the loss-making KEPCO, saying its self-rescue plans alone are insufficient.