Korea Electric Power (NYSE:KEP) reported its fiscal 2025 fourth-quarter and full-year results, highlighting a return to sizable annual profitability as revenue rose and major cost lines, including fuel and purchased power, declined year over year. Management also discussed expectations for 2026 electricity sales volumes, generation mix trends, nuclear capacity factors, and the company’s approach to tariffs, dividends, and certain provisions and liabilities during the Q&A portion of the call.
Full-year 2025 results: operating income KRW 13.5 trillion
KEPCO said consolidated operating income for 2025 totaled KRW 13.5248 trillion. Consolidated revenue increased 4.3% year over year to KRW 97.4345 trillion, driven primarily by power sales revenue, which rose 4.6% to KRW 93.0046 trillion. Overseas business and other revenue declined 1.8% to KRW 4.4299 trillion.
- Fuel costs fell 13.8% to KRW 19.4364 trillion.
- Purchased power costs decreased 1.8% to KRW 34.0527 trillion.
- Depreciation expense increased 2.3% to KRW 11.6678 trillion.
Among non-operating items, KEPCO reported that interest expense fell by KRW 325.6 billion to KRW 4.3395 trillion. The company reported 2025 consolidated net income of KRW 8.7372 trillion.
Demand, fuel prices, and SMP: 2025 recap and 2026 outlook
IR Head Eom Tae-seop said annual power sales volume in 2025 totaled 549.4 TWh, down 0.1% year over year, attributing the decline to weaker industrial demand amid an economic downturn. For 2026, the company expects a slight increase in total sales volume, citing expectations for a higher economic growth rate and more operating days.
Management also provided reference points on fuel and market pricing trends during 2025, including:
- Bituminous coal (Australia benchmark) at around $105.7 per ton
- LNG (JKM) at around KRW 980,000 per ton
- System marginal price (SMP) at around KRW 112.7 per kWh
Generation mix and nuclear capacity factors
KEPCO said its 2025 generation mix reflected increased contributions from nuclear and coal due to higher capacity factors, while LNG’s share declined as installed capacity decreased and baseload generation increased.
For 2026, management expects nuclear’s share to increase, coal’s share to decrease, and LNG to remain largely flat. The company provided an annual capacity factor outlook by fuel source:
- Nuclear: mid-to-high 80% range
- Coal: mid 40% range
- LNG: early-to-mid 20% range
In response to a question about an unusual fourth-quarter nuclear mix shift, management reiterated that the nuclear capacity factor target is intended on an annual basis and said capacity can look lower at certain points of the year. The company pointed to nuclear plants completing maintenance and preventive maintenance, as well as the addition of new power plants, as factors supporting higher nuclear capacity factors in 2026.
Provisions, RPS expense, and funding
KEPCO disclosed that 2025 Renewable Portfolio Standard (RPS) expense totaled KRW 3.9897 trillion on a consolidated basis and KRW 4.8188 trillion on a standalone basis.
On the balance sheet, the company said consolidated total borrowings as of 2025 Q4 were KRW 129.8 trillion, with standalone borrowings of KRW 84.9 trillion (as stated on the call).
During Q&A, management addressed several questions about provisions and liabilities. In response to an inquiry about “other costs” that appeared concentrated in Q4, the company said provisions related to greenhouse gas emissions increased by KRW 120.6 billion year over year to KRW 340.6 billion. On nuclear site recovery provisions, management referenced changes year over year and described write-backs, adding that it would discuss internally and follow up regarding the timing of when such items are booked.
In a separate response about provisions and liabilities, the company said provisions booked for nuclear site recovery increased by KRW 904.5 billion to KRW 24.0769 trillion. Used nuclear fuel-related provisions decreased by KRW 178.4 billion to KRW 2.7453 trillion, while mid- and low-level nuclear waste provisions increased by KRW 10.2 billion to KRW 1.0772 trillion.
Tariffs, dividend discussion, and other Q&A items
Management was asked about potential industrial tariff changes, including time-based pricing and regional pricing. KEPCO said changing load patterns—citing growth in solar PV—are prompting the development of seasonal and time-period pricing approaches. The company also said it is considering demand dispersion and “balanced growth” across regions while working with the central government on a revised pricing scheme. However, it said it was too early to provide a timeline or quantify the impact on average unit prices, adding that it is also gathering input from corporates and the broader business community.
On fuel cost pass-through, KEPCO said it already operates a fuel cost linkage system that reflects fuel prices in tariffs on a quarterly basis, and it is working with the government and stakeholders to improve how the system is implemented.
Regarding dividends, management said the dividend payout ratio decreased to 13.65% from 16.5% a year earlier, but noted that standalone net income rose significantly and that DPS increased to around KRW 1,541. For 2026 dividends, the company said it could not comment on direction because, as a public corporation, dividend decisions are made in consultation with government departments under relevant legislation.
KEPCO also discussed drivers behind differences between consolidated and standalone performance, attributing the gap to subsidiary-related costs that are included in consolidated results but not in standalone figures. On pre-tax profit, management pointed to foreign exchange-related valuation impacts at subsidiaries, including lease liabilities that could not be hedged, which affected financial income and expenses.
Finally, when asked about the bond issuance cap, management said the exact figure would be calculated after dividend-related decisions are finalized by the board and shareholders meeting, and that it expects the level to be “just over 3x” once those items are finalized.
About Korea Electric Power (NYSE:KEP)
Korea Electric Power (KEP) is a South Korea–based integrated electric utility engaged in the generation, transmission and distribution of electricity. The company’s activities span power plant operation and maintenance, grid management, fuel procurement and power trading, as well as engineering, procurement and construction (EPC) services for large-scale power projects. Its asset base includes a mix of thermal, nuclear, hydro and renewable generation capacity, and the company supports system planning and reliability functions for the national electricity network.
In addition to core utility operations, KEP provides a range of technical and consulting services tied to power infrastructure, including plant construction, refurbishment and decommissioning support.
