1. What Happened in KEPCO’s H1 2025?
KEPCO reported consolidated revenue of KRW 46.17 trillion, operating profit of KRW 2.14 trillion, and net income of KRW 1.18 trillion. While robust electricity sales drove significant revenue growth, high interest expenses and debt burden remain key challenges.
2. What Drove the Performance?
- Positives: Increased electricity sales driven by economic recovery, strong performance in nuclear power generation, and expanding investments in renewable energy.
- Negatives: A massive debt of KRW 206 trillion and a high debt-to-equity ratio of 475.6%, coupled with substantial interest expenses of KRW 2.47 trillion for the half-year and investment burden from large-scale assets under construction.
3. What’s the Outlook for KEPCO?
In the short term, high debt and the possibility of rising interest rates could constrain KEPCO’s profitability. However, in the long term, nuclear power plant exports and the expansion of renewable energy projects are expected to provide positive growth momentum.
4. What Should Investors Do?
KEPCO presents a complex investment proposition with both growth potential and inherent risks. Investors should carefully consider the company’s efforts to improve its financial structure, the performance of its new businesses, and changes in government policies before making investment decisions. The current investment recommendation is ‘Neutral’, and it’s crucial to closely monitor KEPCO’s progress in strengthening its financial health and achieving tangible results in its new ventures.
Frequently Asked Questions
Q: What are KEPCO’s main businesses?
A: KEPCO is a public corporation responsible for the entire electricity business, including generation, transmission, distribution, and sales. It produces and supplies electricity through various sources, such as nuclear, thermal, hydro, and renewable energy.
Q: What is KEPCO’s financial status?
A: KEPCO’s high debt-to-equity ratio is a major concern. As of H1 2025, it stands at 475.6%, which could exacerbate financial burdens if interest rates rise. However, the company is striving for stabilization through government support and its own financial restructuring efforts.
Q: What are KEPCO’s future growth drivers?
A: KEPCO is focusing on exporting nuclear power plants and expanding its renewable energy business. Achievements in the nuclear sector, such as winning a new nuclear power plant contract in the Czech Republic and the commercial operation of the Barakah Nuclear Power Plant Unit 4 in the UAE, coupled with diversification of the renewable energy portfolio, including the Jeju Hallim offshore wind power project and the Sudair solar power project in Saudi Arabia, are expected to serve as long-term growth drivers.