Korea Electric Power Corporation (KEP) Q1 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed picture: revenue and operating profit have increased, but there are concerns about high borrowing levels and lack of clarity on debt repayment plans. The Q&A revealed management's avoidance of certain questions, adding uncertainty. Positive aspects include reduced costs and increased non-operating profit. However, the absence of a share buyback program and unresolved transmission issues offset these positives. Overall, the sentiment is neutral due to balanced positive and negative factors.
Key Financial Performance
Operating Profit KRW3.75 trillion, year-over-year change not specified.
Revenue KRW24.2 trillion, up by 4% year-over-year.
Electricity Sales Revenue KRW23.2 trillion, up by 4.7% year-over-year.
Other Revenue KRW1.1 trillion, down by 10.2% year-over-year.
Cost of Sales and SG&A Expenses KRW20.47 trillion, down by 6.9% year-over-year.
Fuel Cost KRW5 trillion, down by 18.7% year-over-year.
Power Purchase Cost KRW8.75 trillion, down by 4.8% year-over-year.
Depreciation Expenses KRW2.95 trillion, increased by 5.1% year-over-year.
Interest Expense KRW1.1 trillion, down by KRW34.6 billion year-over-year.
Net Profit KRW2.36 trillion, year-over-year change not specified.
Electricity Sales Volume 141 terawatt hours, down by 0.5% year-over-year.
Borrowing KRW133.2 trillion on a consolidated basis, year-over-year change not specified.
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Operating Highlights
Electricity Sales Volume: Electricity sales volume in Q1 reached 141 terawatt hours showing a 0.5% decline due to decreased industrial sales from sluggish export.
Full Year Sales Projection: For full year 2025, KEPCO projects sales to go down slightly due to the impact of lower economic growth and slowdown in the manufacturing industry.
Revenue: Revenue was KRW24.2 trillion, up by 4%.
Cost of Sales and SG&A Expenses: Cost of sales and SG&A expenses totaled KRW20.47 trillion, down by 6.9%.
Fuel Cost: Fuel cost is KRW5 trillion, down by 18.7%.
Power Purchase Cost: Power purchase cost is KRW8.75 trillion, down by 4.8%.
Depreciation Expenses: Depreciation expenses came to KRW2.95 trillion, increased by 5.1%.
Interest Expense: Interest expense amounted to KRW1.1 trillion, down by KRW34.6 billion from the same period last year.
Generation Mix: The generation mix for nuclear went up from the introduction of a new plant and higher utilization, while coal generation mix is down from lower utilization.
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Risk or Challenges
Electricity Sales Performance: Electricity sales volume in Q1 2025 declined by 0.5% due to decreased industrial sales from sluggish exports. For the full year, sales are projected to decrease slightly due to lower economic growth and a slowdown in the manufacturing industry.
Fuel Price Volatility: The price of coal and LNG is subject to fluctuations, with coal priced at approximately $105.3 per ton and LNG at KRW1.06 million per ton. This volatility can impact operational costs and profitability.
Regulatory and Economic Factors: Management plans and financial figures are subject to uncertainty and investment risk, indicating potential regulatory challenges and economic factors that could affect business operations.
Funding and Debt Levels: As of Q1 2025, KEPCO's borrowing stood at KRW133.2 trillion, which may pose risks related to financial stability and interest expenses.
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Guidance & Outlook
Electricity Sales Outlook: For full year 2025, we project sales to go down slightly due to the impact of lower economic growth and slowdown in manufacturing industry.
Generation Mix Expectations: For full year of 2025, we expect that the nuclear generation will slightly increase and coal also expected to go up slightly while LNG mix is expected to go down slightly.
Utilization Rate Projections: Expected utilization rate by generation source for 2025 are for nuclear it's at the mid-80% range, coal early-50% and LNG at mid-20% range.
Revenue Growth: Revenue was KRW24.2 trillion, up by 4%.
Operating Profit: Q1 2025 consolidated operating profit was KRW3.75 trillion.
Net Profit: Net profit for the period was KRW2.36 trillion.
Cost of Sales: Cost of sales and SG&A expenses totaled KRW20.47 trillion, down by 6.9%.
Fuel Cost: Fuel cost is KRW5 trillion, down by 18.7%.
Interest Expense: Interest expense amounted to KRW1.1 trillion, down by KRW34.6 billion from the same period last year.
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Shareholder Return Plan
Share Buyback Program: None
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Key Q&A
Q:What drove the increase in non-operating profit on a separate basis? What is the size of this profit?
A:The increase in non-operating profit is due to an increase in dividend profit of KRW1.7 trillion, leading to a total of KRW1.8 trillion from our subsidiary company.
Q:How much has the coal settlement coefficient changed compared to last year, and what is the expected change for the full year 2025?
A:There has been a slight increase in the settlement coefficient for coal and nuclear energy, but we have not reassessed the amount for the full year yet.
Q:Is the decline in coal generation volume due to increased utilization of nuclear power plants or other reasons?
A:The decline in coal generation is due to the operation of nuclear power plants and limitations in transmission capacity.
Q:What is the fuel cost outlook for this year including S&P price?
A:We do not have an official guideline for the fuel cost outlook, but we expect coal to be KRW171,000 per ton, LNG at KRW1.06 million per ton, and oil at KRW1,030 per liter.
Q:What is the size of your borrowing and associated interest cost?
A:Our consolidated borrowing for Q1 2025 is KRW133.2 trillion, with an interest cost of KRW1.1 trillion.
Q:Do you have plans for further borrowing or debt repayment this year?
A:We will answer the question offline separately.
Q:What is the dividend payout ratio and can it be sustained going forward?
A:The current dividend payout ratio is based on the short increase of profit on a consolidated basis, and future plans will be determined in January next year.
Q:When do you expect the transmission limitation for the east coast area to be resolved?
A:The completion date for the transmission connections is scheduled for 2025 and 2026, but it is yet to be seen.
Q:What was the unit fuel cost for Q1?
A:The estimated fuel cost for Q1 is KRW190,000 per ton for coal, KRW1.1 billion per ton for LNG, and KRW1,100 per liter for oil.
Q:What was the fuel cost for nuclear power plants in Q1?
A:The fuel cost for nuclear power plants in Q1 was KRW490 billion.
Q:What is the coal utilization rate and will it reach 50% within the year?
A:The utilization rate for coal going forward will be shared offline.
Q:What is the reason for the increase in IPP purchase unit cost?
A:I will follow up on this question later.
Q:What is the expected change in the climate environment tariff?
A:The adjustment of the climate environment cost is still under negotiation with the government.
Q:What is the outlook for the coal individual consumption tax?
A:The discount on the individual consumption tax for coal has not been determined if it will be extended.
Q:What is the financial profit and cost for Q1 on a separate basis?
A:The financial profit is KRW1.96 trillion, financial cost is KRW730 billion, and dividend profit is KRW1.8 trillion.
Q:What is the overall CapEx plan for T&D for this year and the next two years?
A:The T&D plan is being developed alongside the 11th basic plan for electricity power supply and demand.
Q:What is your plan regarding the surge in industrial electricity tariff?
A:We are discussing the issue with KPX and the Ministry to improve the direct purchase arrangement.
Q:Review of Unclear Management Responses
A:Management avoided providing a direct answer regarding plans for further borrowing and debt repayment, stating they would answer offline. Additionally, they did not provide a clear timeline for the resolution of transmission limitations and the adjustment of the climate environment cost.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Co Ltd
Difficulty IR
ET Moon
English presentation
General Manager
Head Difficulty
IFRS standard
IR KEPCO
IR Manager
IR Yong
IR detail
KRW electricity
KRW item
KRW period
KRW power
Korean content
Kyeongwon Meritz
Ltd evening
Manager IR
Manager Transcript
Meritz Securities
Moon Kyeongwon
Power General
SGA KRW
Securities Co
Senior IR
Seop Senior
Thae Seop
Transcript ET
Yong Thae
afternoon General
afternoon Head
change Depreciation
figure
KEP Transcript
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The earnings call summary and Q&A reveal several concerning factors: operating income underperformed expectations, provisions related to greenhouse gas emissions and nuclear site recovery increased significantly, and management avoided clear answers on several key issues. Additionally, the dividend payout ratio decreased, and there were no notable positive catalysts like new partnerships or strong guidance. The lack of clarity and the financial underperformance suggest a negative sentiment, likely leading to a stock price decline in the range of -2% to -8%.
Korea Electric Power Corporation (KEP) Q2 2025 Earnings Call Transcript
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The earnings call presents a mixed outlook. While KEPCO shows positive financial performance with increased revenue and profit, concerns arise from the trend of direct power purchasing reducing sales, limited tariff increase room, and lack of clarity on U.S. market entry. The Q&A reveals uncertainties around tariff adjustments and fuel price outlook. These factors, alongside the absence of market cap data, suggest a neutral sentiment, with potential minor fluctuations in stock price.
Korea Electric Power Corporation (KEP) Q1 2025 Earnings Call Transcript
Unknown5-14
The earnings call presents a mixed picture: revenue and operating profit have increased, but there are concerns about high borrowing levels and lack of clarity on debt repayment plans. The Q&A revealed management's avoidance of certain questions, adding uncertainty. Positive aspects include reduced costs and increased non-operating profit. However, the absence of a share buyback program and unresolved transmission issues offset these positives. Overall, the sentiment is neutral due to balanced positive and negative factors.
Korea Electric Power Corporation (KEP) Q3 2024 Earnings Call Transcript
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The earnings call indicates mixed signals: strong operating profit and sales growth, but significant borrowing and rising interest expenses pose risks. The lack of a share buyback or dividend program, coupled with regulatory costs, adds uncertainty. The Q&A revealed limited guidance on future costs and unclear responses, affecting sentiment. Overall, financial performance is solid, but risks and lack of clear positive catalysts suggest a neutral stock price movement over the next two weeks.
KEP Report
Frequently Asked Questions
Where does this earnings call transcript come from?
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Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
