South Korea’s state utility firm Korea Electric Power Corporation (KEPCO) reported its first quarterly profit in the first quarter in three years, largely through lowered import cost from cheap international oil prices and subdued commercial fuel demand amid virus pandemic.

The utility name disclosed on Friday a net profit of 53.6 billion won ($43.6 million) in the first quarter, a dramatic reversal from losses of 1.3 trillion won in the previous quarter and 761.2 billion won in the same period a year ago.

Operating profit also came to 430.6 billion won, turning from a loss of 1.59 trillion won in the previous quarter and 629.9 billion in the previous year. It is the first quarterly profit since the third quarter of last year and the first quarterly profit for the first-quarter period since 2017. In 2018, KEPCO logged an operating loss of 127.6 billion won in the January-March period and 629.9 billion won last year.

Sales reached 15.09 trillion won in the first quarter, up 1 percent from the previous quarter and down 1 percent from the previous year.

Shares of KEPCO were trading 4.1 percent lower at 22,200 won as of 1 p.m. on Friday as its earnings mostly derived from negative economic conditions.

Oil prices have plunged in recent months as businesses cut back production to cope with the coronavirus outbreak that has led people all around the world to avoid travel and stay indoors.

According to KEPCO, it spent 4.14 trillion won in fuel costs in the January-March period, down 881.3 billion won from the same period a year ago. Its purchase power cost fell from 5.5 trillion won to 4.8 trillion won in the cited period. The state utility firm was able to save about 1.6 trillion won in purchase power cost and fuel costs from total spending.

Its profit from energy sales slipped 0.9 percent on year in the first quarter to 14.3 trillion won amid a 1.8 percent decline in energy sales. The drop is mainly blamed at decreased demand for heating during winter from a year ago and coronavirus impact on businesses.

By contract-type power sales, revenue from household-use energy increased 3.7 percent while industry-use dropped 2.3 percent.

KEPCO’s coal utilization rate reached 60.4 percent in the first quarter, down 12.1 percentage points from the previous year. The fall came amid suspension in some of its coal-fired power plants amid the government’s continuous policy efforts to reduce fine dust and emissions.

KEPCO’s nuclear power utilization rate also fell 2 percentage points to 73.8 percent.

KEPCO’s first-quarter operation cost increased 400 billion won from a year ago due to power facility increase from newly built power stations and transmission and distribution lines. Costs for discharging greenhouse gas emissions increased by 100 billion won.

KEPCO said that continuing of low international oil prices will have a positive effect on its business environment, although uncertainty is expected to grow amid high volatility in currency and oil prices due to coronavirus pandemic and competition among oil-producing countries to increase production.

By Lee Eun-joo

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