KEPCO shares lose nearly 7% upon agreeing to freeze power rates in summer peak

[Photo by Kim Ho-young]

Shares of state utility Korea Electric Power Corporation (KEPCO) lost nearly 7 percent on Monday on concerns of deterioration in its bottom line upon agreeing to further delay in upward revision in electricity fees due to spike in international fuel prices to avoid adding to inflationary buildup.

KEPCO shares closed 6.88 percent lower at 25,050 won in Seoul trading on Monday after its disclosure of July-September rates reflected no change in the summer peak season despite surge in imported fuel prices.

After reporting its first profit in three years last year, KEPCO¡¯s financial statement is expected to sharply deteriorate this year as it cannot raise power charges in respect to ongoing Covid-19 hardship on small merchants and businesses. Its operating profit fell 39 percent on year in the first quarter.

Inflation has accelerated to above 2 percent in recent months due to surge in oil prices.

Soft coal prices rose to 133.65 won/kg over the past three months, LNG prices to 490.85 won/kg, and bunker fuel prices to 521.37 won/kg. The unit price should have been 0.0 won per kWh in the third quarter, 3.0 won higher than the second quarter if they had been reflected.

KEPCO plans to rationalize rates in the fourth quarter bill.

[¨Ï Maeil Business Newspaper & mk.co.kr, All rights reserved]