Korea Electric Power (KOP) Q2 2026 Earnings Report

The call presents a mixed picture: KEPCO delivered positive consolidated operating income and net income with modest revenue growth and strong other/overseas revenue, and management has concrete operational and funding plans (nuclear unit additions, profit-focused approach to meeting bond cap). However, significant near-term headwinds exist — notably an 8.8% rise in fuel costs, higher operating expenses, declining 1H nuclear output, rising SMP in recent months, large consolidated borrowings, and uncertainty around tariff reform and funding for major grid/mega projects. On balance the risks and cost pressures outweigh the positive results and initiatives communicated in the call.

KEPCO said it expects full‑year 2026 power sales volume to be slightly higher than 2026 1H (266.7 TWh, -0.6% Y‑o‑Y in 1H) and reiterated a modest shift in the generation mix (nuclear to increase slightly, coal to decrease slightly, LNG broadly maintained) with 2026 capacity‑factor guidance of low‑ to mid‑80% for nuclear, low‑ to mid‑50% for coal and low‑ to mid‑20% for LNG; near‑term actions include adding Saeul Unit 3 to the grid and tighter scheduling of preventive maintenance to support nuclear output. Management flagged continued tariff discussions with government (regional differentiated tariff public hearing in H2, potential finalization and introduction by year‑end) as helpful to restore operating losses and meet financing targets, and said it will strive to meet the regulator’s bond issuance cap target (corporate bond issuance to capital+reserves below 2x) by end‑2027 largely through higher operating profits rather than simply cutting issuance. They also noted funding and CapEx for mid‑ to long‑term national “mega” projects will be phased over time and coordinated with stakeholders; key 1H metrics referenced on the call included consolidated operating income KRW 4,912.7 billion, net income KRW 2,796.5 billion, revenue KRW 46,317.3 billion (+0.3%), fuel costs KRW 10,142.9 billion (+8.8%), purchase power costs KRW 17,206.9 billion (-0.9%), RPS cost consolidated KRW 2,533 billion (stand‑alone KRW 2,938.9 billion), consolidated borrowings KRW 133.3 trillion (stand‑alone KRW 84.8 trillion), bituminous coal ~USD 128.2/ton, JKM LNG ~KRW 939,000/ton, and SMP trends (1H ~KRW 112.3/kWh; July/Aug showing upticks to ~133 and ~151 vs prior year 121/117).