South Korean utility behemoth,
Korea Electric Power Corporation
), 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.
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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
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
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
Brookfield Infrastructure Partners L.P.
Otter Tail Corporation
) , all carrying a Zacks Rank #1 (Strong Buy).