The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Dong-jin Kang - Hyundai Motor Securities - Analyst
: (Spoken in Korean) My first question is about the nuclear power plant utilization rate. So, of course the utilization rate has gone down considerably
since its peak rate. So, what is your guidance for the nuclear power plant's utilization rate in the third quarter and fourth quarters of this year?
And also same question about the coal-fired power plants. What is your outlook for the utilization rate? And then for the coal price -- we see that
the coal price recently has fallen, but then this is not -- your outlook for coal pricing roughly remains the same. So, when do you believe that the
drop in the coal pricing will be booked for the year?
Unidentified Company Representative
(Interpreted) Regarding the first question about the guidance for the nuclear power plant utilization rates for the third and fourth quarters of this
year, please understand that we are not in the position to disclose this information.
And pertaining to your second question about the utilization rate of the coal-fired power plant, the guidance or the outlook for this year on average
is about mid-70%. So, this remains unchanged.
And regarding your question about the coal price, particularly the bituminous coal, and also the fact that there seems to be no change to the per
calorie price of the fuel for the Company, well, you have to understand there are various factors at play.
So, for example, there have been changes to the tax rate and also particularly for the bituminous coal, it is also dependent on the contract with
the GENCOs as well as the exchange rate. So, please understand it is very difficult for us to give you any outlook on when the drop in the coal price
will be reflected into the Company's account.
Unidentified Company Representative
(Interpreted) Are there any follow-up questions?
Question: Jahan Miu - - Analyst
: (Interpreted) My first question is about the purchase power cost. So, now for the RAC in particular, it seems as if the total cost seems to be similar
to the second quarter. But then in terms of the purchase volume, I wonder whether there have been any changes to the purchase volume. And
then also for the unit price, it seems as if there has been a decline while up YoY. So, do you see this declining trend continuing into the second half
of this year?
And the second question is about the revision to the power rate, the tariff. So, we understand that this will be announced by November this year,
but have there been any decisions or planning made so far?
Unidentified Company Representative
(Interpreted) Now in response to your first question for the purchase power cost, so for the RPS costs there are largely two components. One is the
cost incurred by GENCOs, the subsidiaries, and the second is the compensation to the independent power generators, the power plants.
So for the GENCOs, the cost for the GENCOs is they will be recognized on an accrual basis meaning that they will be [accounted] at the time of the
accrual. And then for the compensation to the independent power plant, they would also be accounted at the time of the invoicing.
And then regarding the RAC for the GENCOs we do not have the exact statistics yet, but then it appears as if the purchase volume has been
decreased. And as for the compensation to the independent power plants, the amount for the compensation has gone up considerably in the first
half, which has driven up the overall cost of the RPS. And as for the trend in the second half, we do not have the data at this point because of the
number of variables and uncertainties involved.
And to your second question specifically about whether there are any plans to adjust the rate itself, there is no such planning at this point. We are
trying to revise the tariff system to be more financially sustainable for KEPCO. And this planning will be done by the end of November this year.
And afterwards will be having consultations with the government and we will be submitting the plan for approval by the government in the first
half of next year.
Question: Sayon Parke - Nomura Securities - Analyst
: (Spoken in Korean) The first question is about your investment plans, so the plan for this year was KRW16 trillion. And in the first half we seen that
KRW6.7 trillion or KRW6.8 trillion has actually been spent. So, does this mean that the remaining of the planned KRW16 trillion in investment will
be spent in the second half of this year? Or do you believe that the actual spending compared to -- versus the investment plan will fall short of the
planning?
And then the second question is we see that for the parent company, their financial performance has improved in the second quarter. So, is this
due to improvement in sales or have there been any changes to the adjustment coefficient?
Unidentified Company Representative
(Interpreted) In response to your first question about the investment execution, yes, it is true that in the first half the execution percentage fell
short of our plans, but then our plan right now is to spend all of the planned investment for the year. Having said that, there could also be some
changes in the actual spending of the investment because of the construction period or also depending on the actual payment agreed on contracts.
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AUGUST 14, 2019 / 8:00AM, 015760.KS - Q2 2019 Korea Electric Power Corp Earnings Call (English, Korean)
And then to your second question, so for the three months in the second quarter for -- on a non-consolidated basis KEPCO had seen KRW260 billion
in income. And on one hand it is due to the increase in the nuclear power plant utilization rate, and also due to the lower purchased power cost,
for example, because of the revision in the consumption tax which had also lowered the LNG purchase cost for us. And there has also been some
impact from the -- in the revision of the adjustment coefficient.
Question: Young Fox Chin - Morgan Stanley - Analyst
: (Spoken in Korean) (Interpreted) It's a follow-up question to the previous one. So, it's about the CapEx planned for KRW16 trillion for this year. Then
can you just give us a breakdown of your CapEx plans for the second half of this year?
Unidentified Company Representative
(Interpreted) In the second half KRW2.4 trillion is planned for the reinforcement of the transmission and distribution facilities in the second half
and also KRW3.2 trillion for the reinforcement of generation facilities.
Question: Mino Ho - Shinhan Financial Investment - Analyst
: (Spoken in Korean) (Interpreted) The first question is about your emission -- carbon emission and also the RPS. So can you tell me tell us about the
cost for the two items on both the consolidated and non-consolidated basis? And the second question is when do you believe that you will be
getting the approval for the operation of the [Shin 100 #1]?
Unidentified Company Representative
(Interpreted) In response to your first question for the three months between April to June in 2019, in terms of the emission rights for greenhouse
gas. On a non-consolidated basis it was KRW800 million. On a consolidated basis it was KRW23.5 billion or RPS on a non-consolidated basis KRW594.8
billion, on a consolidated basis KRW436.4 billion.
And regarding your second question, the official position of the (inaudible) is that they will be completing this by November this year. But then
because of the pilot operation period there are some uncertainties and variable factors. So, if there are any changes to the planning then we will
communicate with the market as soon as possible.
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