|
1Q sales slump sparks talk of increases in electricity prices
April 16, 2009
|
|
| As Koreans are using less electricity due to the global economic slump, Korea Electric Power Corp., the supplier of almost all of the country’s electricity, has posted on-year losses for the first quarter this year, on top of its record loss in 2008. During January through February this year, Kepco saw an operating loss amounting to 1.2 trillion won ($897.5 million) with sales falling and fuel costs rising. The sales volume of electricity for industrial use during Q1 this year shrank 2.3 percent on-year according to the electricity committee of the Ministry of Knowledge Economy yesterday. Fuel prices rose 32 percent during the first quarter mainly due to the won’s depreciation against other currencies. Sales of electricity have been falling steadily this year due to the continuous lack of demand and stunted factory operations following the global economic slowdown. “There is increasing pressure for Kepco to raise electricity prices as they are posting continuous losses this year,” the ministry said in an official release yesterday. The company late last month revealed that it “may” raise power prices soon, saying that it might post its second consecutive annual loss this year without a price hike. In 2008, Kepco, the nation’s biggest utility company, posted a yearly loss of 2.95 trillion won, the first loss in its 26-year history, due to skyrocketing oil prices that added to the plummeting value of the won. Kim Ssang-su, head of the state-run company, has said that Kepco needs to raise its electricity prices by more than 15 percent in order to come out of the red and that the government has agreed that it should hike up costs when the economy begins to show signs of recovery. Meanwhile Kepco is joining the race to secure uranium as concerns emerge about a future shortage of the raw material. Kepco is slated to buy around a 20 percent stake in Canadian uranium company Denison Mines Corp. Denison said yesterday that Kepco will buy a 19.9 percent stake in the company for $75.4 million. With the deal, Denison will sell a maximum 690,000 pounds of uranium to Kepco a year, starting from 2010 until 2015. Also, Kepco has earned the power to appoint two people to Denison’s board of directors. Denison has been in a crunch to meet its production targets recently and had to temporarily close two of its mines in the U.S. as uranium prices fell. By Cho Jae-eun [jainnie@joongang.co.kr] |
|
