KEPCO’s debt hits over $149 bn for first time in June

Korea Electric Power Corp. (KEPCO) headquarters in Naju, South Jeolla Province. [Photo by Yonhap]

South Korean utility provider Korea Electric Power Corp. (KEPCO) saw its debt surpass 200 trillion won ($149.3 billion) for the first time in June, mainly as it was not able to raise electricity rates timely and instead issued bonds.

KEPCO said Tuesday that its overall debt surged to 201.4 trillion won as of June, marking an increase of about 8 trillion won in just six months since the end of the previous fiscal year, which saw the debt at 192.8 trillion won.

The primary factor behind the escalation lies in the company’s struggle for profitability, leading to an accumulated deficit of 47 trillion won. Although KEPCO has implemented five rounds of electricity rate hikes since last year, the decline in global energy prices during this year has marginally enhanced profitability yet insufficiently to offset the cumulative deficit.

According to financial tracker FnGuide Inc., KEPCO is anticipated to achieve profitability during the third quarter of this year, with an estimated operating profit of 1 trillion won. The full-year outlook, however, remains dim. KEPCO is projected to incur an operating loss of about 7 trillion won.

KEPCO asserts that it requires further adjustments to electricity prices to narrow losses.