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Page added on January 29, 2009

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Korea Electric Posts Record Loss on Fuel Costs, Won

Korea Electric Power Corp., supplier of almost all of the country’s electricity, posted the biggest quarterly loss in the company’s 26-year history after the falling won boosted the cost of importing fuels.


The loss widened to 2.16 trillion won ($1.58 billion) in the three months ended Dec. 31 from 647.2 billion won a year earlier, according to Bloomberg calculations based on full-year results released today by the Seoul-based utility. Five analysts surveyed by Bloomberg expected an average loss of 912.8 billion won.
Fuel costs at the state-controlled utility, which imports crude oil, coal and gas to generate electricity, climbed 52 percent in the fourth quarter, Hana Daetoo Securities Co. said in a Jan. 9 report. Korea Electric, also known as Kepco, will cut 11 percent of its workforce or 2,420 jobs to reduce costs, the company said last month.


The South Korean economy shrank 5.6 percent in the fourth quarter from the third quarter, the biggest drop since the Asian financial crisis 10 years earlier. Exports of cars and petrochemical products dropped, cutting demand for the country’s currency.


The economy may shrink 2.5 percent this year, compared with a previous forecast for a 0.5 percent expansion, JPMorgan Chase & Co. said in a report Jan. 23.


Bloomberg



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