Korea Electric Power (015760) H1 2024 earnings summary

Executive summary

• Q2 2024 operating income reached KRW 2.5496 trillion, with net profit at KRW 710.3 billion, reflecting improved financial performance year-on-year.

• Korea's only fully integrated electric utility, holding a near-monopoly in transmission and distribution, with 100% market share and 51% government ownership as of 1H 2024.

• Total assets reached KRW 241 trillion and consolidated revenue was KRW 43.7 trillion for 1H 2024.

• Strong government support and credit ratings on par with the Korean sovereign (Aa2/AA).

Financial highlights

• Operating revenues increased 6.2% year-on-year to KRW 43.7664 trillion, driven by an 8% rise in power sales revenue.

• Operating profit turned positive at KRW 2.5tn, an increase of KRW 11.0tn year-over-year.

• Cost of goods sold and SG&A expenses decreased by 17% to KRW 41.2168 trillion, mainly due to lower fuel and power purchase costs.

• Debt reduced from KRW 89.6tn at end-2023 to KRW 85.2tn at end-June 2024.

Outlook and guidance

• No tariff hikes occurred in H1 2024, but further increases are under consideration for H2 to address accumulated deficits and financial soundness.

• Targeting over 70% carbon-free power generation by 2038, up from 40% in 2023.

• Accelerating coal exit, with plans to replace coal plants with LNG and carbon-free sources.

• Renewable capacity expected to reach 120GW by 2038.

• Annual power sales are expected to see a slight decline due to continued weakness in the manufacturing sector.