1. KEPCO Q1 2025 Performance: What Happened?
KEPCO reported revenue of KRW 24.224 trillion (up 4.0% YoY), operating profit of KRW 3.7536 trillion (returning to profitability), and net income of KRW 2.3617 trillion (also back in black). The surge in the nuclear power segment is particularly noteworthy, achieving KRW 4.2749 trillion in revenue (up 26% YoY), fueled by the success of the UAE nuclear power plant and the Czech nuclear power plant project.
2. Reasons for the Turnaround: Why the Improvement?
This return to profitability is attributed to a combination of factors: increased electricity sales prices, higher nuclear power generation, stabilized fuel costs, and efficient cost reduction efforts. The growth in nuclear power is expected to be a key competitive advantage for KEPCO in the era of carbon neutrality.
3. Opportunities and Risks: What Does This Mean for Investors?
- Opportunities: Nuclear power expansion, strengthened ESG management, improved financial health efforts, and investments in new businesses.
- Risks: High debt-to-equity ratio (116%), government policies and tariff regulations, macroeconomic variables (exchange rates, interest rates, and raw material prices), and burdens from large-scale investments.
Investors should consider these factors comprehensively. The high debt-to-equity ratio requires particular attention, as it could become a significant burden if interest rates rise.
4. Investor Action Plan: How Should You Invest?
If you are considering investing in KEPCO, you should continuously monitor the expansion of its nuclear power business, the performance of new growth engines, improvements in financial health, and changes in government policies. Focus on long-term growth potential rather than just short-term performance improvements.