SEOUL: South Korean utility major, Korea Electric Power Corporation’s (KEP – Analyst Report) third quarter 2015 net income was KRW 9,276 billion ($8,348.4 million) compared with KRW 1,569 billion in the year-ago quarter. Net income advanced 491.2% year over year. In the first nine months of 2015, net income rose 410% year over year.
The company’s third quarter 2015 revenues also increased 3.8% year over year. In the first nine months of 2015, revenues rose 4%, mainly buoyed by a 2% year-over-year increase in power sales revenues and a 36.6% surge in overseas business revenues. The company’s third quarter operating income surged 51.7%, while the first nine-month figure showed 76.3% growth.
On the cost front, in the first nine months of 2015, selling, general & administrative expenses decreased 5.5% year over year to KRW 35.6 trillion. Fuel costs declined 24.3% to KRW 11.74 trillion. However, purchased power cost increased 3.4% to KRW 8.95 trillion. Depreciation expenses rose 5.8% to KRW 5.36 trillion during the period.
The company expects to have outstanding debt of KRW5.8 trillion by the end of 2015. On a consolidated basis, the company expects operating profit to slightly go down by the end of this year.
Korea Electric Power is an integrated electric utility engaged in the generation, transmission and distribution of electricity in South Korea. The company is a dominant player in Korea’s electricity sector. It is well positioned to capitalize on growth opportunities in this market and to benefit from the industry restructuring initiatives of the Korean government.
Higher electricity tariff rates, increasing electricity volume sales and an improving overseas business will all add to Korea Electric Power’s growth story. However, this would to a large extent be offset by increased price of purchased power and uncertainty surrounding pending regulatory cases.
