[THE INVESTOR] State-owned Korea Electric Power Corp. said in a regulatory filing on May 15 that it logged an operating loss of 127.6 billion won (US$118.9 million) in the first quarter this year, marking two consecutive quarters in the red.

The continuing losses are mainly due to increasing power generation costs which were up 27 percent from a year earlier as the new government has vowed to reduce the country’s reliance on nuclear power. As part of the anti-nuclear drive and transformation to a new energy era, the government has halted operations of eight nuclear reactors to conduct tightened safety check-ups. As a result, KEPCO has replaced nuclear power with more expensive LNG and coal. 

Nuclear power used to account for 80 percent of the country’s generation since 2000 but the number declined to 70 percent in the third quarter of 2017 and 65 percent in the fourth. In the first quarter of this year, the figure is estimated to reach less than 60 percent.

Analysts say KEPCO is likely to suffer from high costs in the coming months amid rising fuel prices.

“It seems inevitable that the company will show sluggish performance until the fourth quarter due to rising oil and coal prices,” Huh Min-ho, an analyst with Shinhan Investment said in a report on May 15. “After the fourth quarter, the company’s profit will see a recovery as some nuclear power plants currently under a safety checkup restart operations in the second half of the year,” Huh said.

By Park Ga-young (gypark@heraldcorp.com)