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State power companies’ profits soar on higher charges, lower fuel costs

[THE INVESTOR] The operating profits of state-run power companies have increased 841 percent in two years, data showed on Aug. 24. The seven companies are Korea Electric Power Corp., Korea South-East Power, Korea Western Power, Korea East-West Power, Korea Midland Power, Korea Southern Power and KEPCO KPS.

According to market researcher CEO Score, the seven state-run power companies’ first-half operating profits came to over 4.23 trillion won (US$3.77 billion) and net profits to 3.92 trillion won. Compared to the same period of 2014, operating profits increased 841 percent, and net profits by 2,957 percent.

The companies’ first-half sales, however, fell 3.6 percent from the same period two years ago.

The contrasting changes in sales and profits have been attributed to fall fuel prices and the electricity price hike. Over the past two years, international oil prices have been halved, while coal has dropped by more than 20 percent. In contrast, electricity price has been raised 5.4 percent.

In terms of operating margin, the companies’ average came to 10.7 percent. In comparison, Samsung Electronics’ operating margin stood at 10.1 percent and that of Hyundai Motor at 9.8 percent.

By company, Korea East-West Power had the highest operating margin, followed by Korea South-East Power and Korea Western Power, which respectively recorded operating margins of 22.8 percent, 20.8 percent and 20.4 percent.

By Choi He-suk (cheesuk@heraldcorp.com)
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