The new liberal government’s powering down of nuclear and coal-fueled reactors dealt a direct blow to the bottom line of South Korea’s state-run utility company Korea Electric Power Corp. (KEPCO), its second-quarter results showed.
The power monopoly’s operating profit on a consolidated basis for the quarter ended June plummeted 68.7 percent on year to a near-three-year low of 846.5 billion won ($751.9 million), falling well below market consensus projections of 1.07 trillion won. Revenue slipped 2.6 percent from the year-ago period to 12.9 trillion won, the company said in a regulatory filing on Monday.
It is the first time the company delivered an income figure of below 1 trillion won since the fourth quarter of 2014.
Shares of KEPCO closed Tuesday up 1.14 percent at 44,550 won.
Nuclear reactors operated at 75.2 percent of their full capacity on average for routine checkup and repair in the summer months of the second quarter. The oldest reactor Kori 1 was also permanently decommissioned as part of the government’s revised energy plan to phase out of coal and nuclear fuel in favor of safer and more eco-friendly energy sourcing.
The second-half prospects are better as the government plans to up the coal fuel rate for industrial power supply. Reactor operation also would likely recover to the average rate of 84 percent in the fourth quarter.
In the mid-term, analysts are positive about the stock price as it remains undervalued.
Its current price-to-book ratio of 0.39 is deemed cheap considering the corporate size and income levels.
By Yoon Jin-ho
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