KEP Posts Lower Loss - Analyst Blog

By
A A A

South Korean utility behemoth, Korea Electric Power Corporation ( KEP ), recorded net loss of KRW3.08 trillion (USD$2.77 billion) in 2012 compared with a net loss of KRW3.29 trillion (USD$2.96 billion) in 2011. This was primarily due to higher fuel costs and power purchase costs.

In full year 2012, operating revenues went up 13.7% year over year to KRW49.42 trillion (USD$44.46 billion). The sale of electricity, the principal component of operating revenues, increased 13.5% to KRW45.98 trillion (USD$41.36 billion). Other revenues rose 16.6% year over year to KRW3.44 trillion (USD$3.10 billion).

Operating expenses grew 13.0% to KRW50.24 trillion (USD$45.19 billion), of which power purchase costs increased 32.4% to KRW9.80 trillion (USD$8.82 billion). Fuel cost rose 11.0% year over year to KRW23.82 trillion (USD$21.43 billion). Overall operating loss shrunk 19.8% year over year to KRW818 billion (USD$0.74 million).

Korea Electric Power is an integrated electric utility engaged in the generation, transmission and distribution of electricity in South Korea. The company along with its generation subsidiaries owns approximately 88.4% of the total electricity generating capacity in Korea.

Korea Electric Power is the dominant player in Korea's electricity sector. It continues to be well-positioned to capitalize on growth opportunities in this market and to benefit from the industry restructuring initiatives of the Korean government. Higher electricity tariff rates, higher electricity volume sales, an improving overseas business and a recent regulatory approval for the fuel cost pass-through mechanism will all add to the growth story. However, this would be offset by escalating fuel costs, increased price of purchased power and uncertainty surrounding pending regulatory cases.

Korea Electric Power currently carries a Zacks Rank #2 (Buy). Investors can also consider other stocks such as Pike Electric Corporation ( PIKE ), Brookfield Infrastructure Partners L.P. ( BIP ) and Otter Tail Corporation ( OTTR ) , all carrying a Zacks Rank #1 (Strong Buy).





BROOKFIELD INFR (BIP): Free Stock Analysis Report

KOREA ELEC PWR (KEP): Free Stock Analysis Report

OTTER TAIL CORP (OTTR): Free Stock Analysis Report

PIKE ELECTRIC (PIKE): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: BIP , KEP , OTTR , PIKE

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

91,252,153
  • $13.78 ▼ 4.31%
68,133,496
  • $12.93 ▲ 6.77%
57,268,074
  • $46.13 ▲ 2.47%
43,432,023
  • $105.22 ▲ 0.37%
40,880,685
  • $13.46 ▲ 8.90%
40,712,405
  • $98.62 ▲ 0.82%
39,776,976
  • $16.72 ▲ 0.72%
34,688,871
  • $11.16 ▲ 3.05%
As of 10/24/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com