A Korea Electric Power Corp. (KEPCO) building in Seoul. (Yonhap)
SEOUL, Nov. 14 (Korea Bizwire) — The Korea Electric Power Corporation (KEPCO), a South Korean state-run utility firm, overcame three consecutive quarters in the red to finally return to profitability.
It has still yet to be determined, however, if the company will be able to stay in the black this quarter.
KEPCO announced on Wednesday that it generated an operating profit of 1.2 trillion won (US$1 billion) for this year’s third quarter, overcoming a recent series of losses.
This quarter’s higher revenue was mainly led by a surge in the use of air conditioners in the summer, which was seen as a temporary boost to the bottom line and not a fundamental solution to overcoming underperformance as argued by experts.
KEPCO’s total operating profit during the last three quarters was 310 billion won, down by 46.5 percent since last year.
Some experts suggested that KEPCO’s post-nuclear policy was responsible for the plunge in profits, a claim that KEPCO denied.
The controversy over KEPCO’s nuclear policy is expected to continue, however, as it plans to gradually mothball its nuclear power plants.
The utility’s struggles also have a direct impact on electricity bills. KEPCO shareholders are calling for electricity prices to rise, since current pricing is too low considering the production cost.
“We need new, sustainable pricing standards for electricity,” said KEPCO CEO Kim Jong-gap. “We will get rid of all old and new discount programs,” he said.
KEPCO plans to deliberate on the new pricing standards at a board meeting scheduled later this month, and submit the plan to the Ministry of Trade, Industry and Energy early next year.
The government, however, has been demonstrating negative views about the idea of raising electricity bills, which leads many to believe that any prices hikes in the short run are unlikely.
H. M. Kang (hmkang@koreabizwire.com)
