Seoul - Korea Electric Power Corp. (KEPCO), the national utility provider, reported a significant reduction in its operating losses for the year 2023, attributing the improvement to a series of electricity rate hikes and comprehensive restructuring efforts. The company's operating loss for the year was recorded at 4.57 trillion won (approximately US$3.43 billion), a sharp decrease from the record loss of 32.66 trillion won experienced in 2022.
According to Yonhap News Agency, the company also saw a reduction in its net loss, which amounted to 4.66 trillion won in 2023, down from 24.43 trillion won the previous year. Sales for the year increased by 23.8 percent to 88.21 trillion won, while operating costs were cut by 10.72 percent to 92.77 trillion won, largely due to cheaper fuel costs.
The utility firm experienced a return to profitability in the fourth quarter of 2023, posting an operating profit of 1.88 trillion won and a net profit of 1.33 trillion won. This marked the second consecutive quarter of gains and the first instance of quarterly operating profit since the first quarter of 2021.
KEPCO implemented three rate increases in 2023: a 13.1 won per kilowatt-hour (kWh) hike in the first quarter, an 8 won increase in the second quarter, and a 10.6 won rise in the fourth quarter, which was specifically applied to commercial electricity use. These adjustments came after a period during which the company was unable to sufficiently raise electricity prices to cover the high fuel costs exacerbated by the COVID-19 pandemic and rising inflation.
In response to mounting losses, KEPCO undertook several "self-rescue" measures, including the restructuring of overseas businesses, selling properties, and other cost-cutting initiatives, totaling an estimated 14.3 trillion won over five years.
Following the announcement, KEPCO's shares saw a 2.17 percent increase on the Seoul stock exchange, closing at 23,550 won.