Korea Electric Power Corp. (Kepco) reported quarterly earnings that missed analyst estimates by $0.39 per American Depositary Receipt (ADR), despite revenue exceeding projections.
The company, which operates South Korea’s power grid and supplies electricity nationwide, disclosed adjusted earnings per ADR of $0.31, below the $0.70 forecast in a Reuters poll. Revenue for the period reached 12.4 trillion won ($9.1 billion), surpassing the 11.8 trillion won estimate.
Kepco attributed the earnings shortfall to higher fuel costs and lower-than-expected power sales margins, which offset gains from increased electricity demand. The utility’s operating expenses rose 8% year-over-year, driven primarily by coal and liquefied natural gas (LNG) procurement.
Analysts noted that Kepco’s financial performance remains sensitive to volatile energy prices, particularly as South Korea relies heavily on imported fossil fuels. The company’s latest results follow a period of regulatory pressure to stabilize retail electricity prices, which have constrained profit margins.
Kepco’s ADRs, which trade under the ticker KEP, fell 2.3% in pre-market trading following the disclosure. The broader South Korean equity market, as measured by the Kospi index, was down 0.5% at the time of the release.
Investors will monitor Kepco’s guidance for the remainder of the year, particularly amid expectations of further volatility in global energy markets and potential adjustments to government energy policies.
