Korea Electric Power Corp. will continue to struggle in the first half of this year, said KB Investment and Securities on Feb. 14, maintaining a “hold” recommendation and lowering the target price to 37,000 won (US$34.14) from 40,000 won.
Its revenue from the fourth quarter last year climbed 1.8 percent on-year to 16 trillion won but bogged down by fuel price rise and electricity sales unit price fall, it has turned to red with 129.4 billion won operating loss, said analyst Kang Seong-jin.
The rise of fuel prices will shrivel its profits in the first half, and coal prices, hovering over US$100 per ton will weigh down the company until the third quarter. LNG prices will continue to increase until the second quarter as well, forecast the analyst.
Persisting slow earnings could lead to a hike in power rates but decisions for changes takes at least four months, noted Kang lowering the operating profit estimate for 2018 by 16.1 percent.
By Hwang You-mee (firstname.lastname@example.org