Korea Electric Power Corporation · KRX:015760
Korea Electric Power — Investor Presentation (March 2003)
23 slides from Korea Electric Power's investor presentation, Mar 25, 2003
Slide 1: Korea Electric Power Corporation March 2003
Korea Electric Power Corporation March 2003
Slide 2: Agenda
Agenda KEPCO Overview Industry Restructuring Financial Review Investment Highlights 2
Slide 3: KEPCO Overview
_.. KEPCO Overview ELECTRIC POWER CORPORATION:
Slide 4: Korea's Leading Company
Korea's Leading Company Assets KRW70.7 trillion (US$58.9 billion) Revenues KRW21.1 trillion (US$17.6 billion) Generating Capacity 49,561 MW Market Capitalization KRW11.7 trillion (US$9.7 billion) 92% Generation 100% Transmission Distribution 100% * Asset, Revenue: KEPCO+Gencos, unaudited, as of Dec
Slide 5: Capital Structure
Capital Structure SH's Equity 60.8% Debt 39.2% Capital Structure Local Currency vs. FX Debt US Dollar 68.8% Japanese Yen 29.1% Others 2.1% FX Debt Currency Mix Local Currency Debt 65% FX Debt 35% 5 * KEPCO+Gencos, unaudited, as of Dec.31. 2002 (KRW/US$ = 1,200.40 ). KRW 14.8 tril. KRW 7.9 tril. KRW
Slide 6: Strong Demand (1)
Strong Demand(1) GDP Growth Demand Growth Demand Growth & GDP Change in Customer Mix 6 * Actual results may be different from the projected. 16.4% 19.4% 58.9% 5.3% 1999 2002 Residential Commercial Industrial Other 21.0% 20.6% 54.3% 4.1% 8.8% 3.0% 6.2% 7.6% 8.0% 10.7% 5.0% 6.8% (6.7%) 11.8% 10.0% 11.
Slide 7: Strong Demand (2)
Strong Demand(2) 11.8 9.1 6.4 8.0 11.0 8.5 6.6 8.3 0% 5% 10% Residential Commercial Industrial Total Volume Revenue* Semiconductor(13%), shipbuilding(12%) & auto (12%, yoy) led the growth. World cup and Thanksgiving slashed the growth in June and Sep., respectively. Excluding the Electricity basis f
Slide 8: Growth Forecast; Tariff; Recent Miss and a Potential Hike
Growth Forecast 8 Tariff; Recent Miss and a Potential Hike 5.9% 6.5% 5.3% 4.0% 0.0% 0.0% 0% 5% 10% 1997 1998 1999 2000 2001 2002 ?% 2003 Strong Demand Growth Forecast 2003 : 7.5% 2004~2005 : 6.6% 2006~2010 : 4.2% The forecast assumes GDP to grow by 5.0% in 2003, and at an annual average of 5.1% from
Slide 9: Cost Control: Efficient Fuel Mix
Cost Control Efficient Fuel Mix: Generation by Fuel Type Pool Price by Fuel Source Nuclear Coal LNG Oil 39.92 41.55 144.66 77.52Won/kWh 2001 2002 Change in Debt* Currency Mix 9 * Interesting Bearing Debt : KEPCO + GENCOs Won 40% 58% 62% USD 55% 29% 27% JPY 1% 12% 11% EUR 4% 1% 0.4% 1997 2000 2001 20
Slide 10: Industry Restructuring
_ Indust Restructurin rep fe oy g
Slide 11: Objectives and Benefits
Improve system efficiency through competition Achieve long-term stability of electricity supply Increase customer satisfaction by expansion of consumer choice Objectives and Benefits 11 Retain transmission business with stable profitability and returns Reduce its outstanding debts through planned as
Slide 12: Restructuring Time Table
Generation Transmission Distribution KPX N G G G G G KPX Transmission Distribution N G G G G G Phase I Preparation Phase II Generation Competition 4/2001 2004 2009 Phase III Wholesale Competition Phase IV Retail Competition Announcement of Industry Restructuring Plan Passage of Restructuring Bills 1
Slide 13: Operation of Power Pool
Operation of Power Pool Mar Apr May June July Aug Sep Oct Nov Dec Jan Feb Monthly BLMP & SMP The Formula Base Load Generator Peak Load Generator Marginal Variable Cost Marginal Fixed Cost BLMP=determined at the pool 21.5Won/ kwh SMP = determined at the pool 7.17Won/ kwh Minor Adjustment + + SMP BLMP
Slide 14: Restructuring Will Cut Capex
Restructuring Will Cut Capex 14 Transmission Nuclear Thermal 1.6 2.0 2.5 2.2 2.8 1.8 2.5 2.1 2. 0 2.6 2.8 3.7 1.9 1.9 2.0 1.8 1.9 2.0 2.1 2.3 2.4 2.6 1.7 1.7 0 2 4 6 8 10 12 2002E 2003F 2004F 2005F 2006F 2007F KRW (in trillion) 7.6 8.1 8.5 9.0 9.7 9.9 Going away Distribution
Slide 15: Genco Sales
Genco Sales Korea South East Corporation("KOSEPCO") is chosen to be sold first. 4 bidders have completed Due Diligence. Current Players Timing & Method A minimum of 34% stake in KOSEPCO plus management control is being offered. Final bids from 4 bidders are to be submitted on Apr.1, 2003. The prefer
Slide 16: Why KOSEPCO?
Why KOSEPCO? Highest Profitability among Gencos Proximity to Load Center & Higher Base Load Capacity KHNP KOSEPCO KOMIPO KOWEPCO KOSPO KEWESPO Base Load (MW) 15,716 3,565 3,400 3,066 3,000 2,900 Peak Load (MW) 534 2,000 3,593 4,280 2,765 4,600 KWh sold/ KWh bid 99.5% 75.4% 59.2% 66.6% 80.9% 60.3% 16
Slide 17: Sale of Non-Core Assets
Sale of Non-Core Assets 17 *Book value : As of Dec 31, 2002 Assets Sold Book Value Ownership Proceeds Sales-to-book Multiple (Unit: KRW bn) 1999 Hanaro Tel. 86 5.3% 241 2.8x Onse Tel. 9 4.1% 23 2.6x 2000 Thrunet 15 9.2% 250 16.5x Shinsegi Tel. 19 2.4% 64 3.4x Anyang/Bucheon P. 155 - 542 3.5x Powerco
Slide 18: Financial Review
_.. Financial Review rORER LECTIIC OUER CORPORATION
Slide 19: Improved Financial Status
Based on consolidated financial statements 2002 numbers (including % D ): KEPCO+Gencos, unaudited (Unit : KRW bn) 1998 % 1999 % D 2000 % D 2001 % D 2002 KWh sold(GWh) 193,470 10.7 % 214,215 11. 8% 239,535 7.6% 257,731 8.0% 278,451 Revenue* 14,228 10.7% 15,751 18.8% 18,708 8.1 % 20 , 225 6.3% 21,127
Slide 20: Financial Review
Financial Review Operating Margin Debt to Equity ratio Average Debt Cost Return on Rate Base 16.4% 16.3% 18.5% 19.7% 1998 1999 2000 2001 2002 22.7% 127.2% 82.3% 84.1% 1998 1999 2000 2001 10.1% 8.7% 8.2% 6.3% 1998 1999 2000 2001 2002 6.1% 5.0% 4.6% 5.0% 1998 1999 2000 2001 20 Based on consolidated fi
Slide 21: Investment Highlights
a Investment Highlights ELECTRIC POWER CORPORATION:
Slide 22: Investment Highlights
Investment Highlights Dominant player in the ever-growing electricity industry Industry restructuring enhances transparency in tariff system Rationalizing operations and focusing on core business Improving financial status with the sale of Gencos & non-core assets 22
Slide 23: Korea Electric Power Corporation disclaimer
Korea Electric Power Corporation This material has been prepared by Korea Electric Power Corporation for the information of investors of the company. This is not intended as an offer or solicitation for the purchase or sale of any financial instrument or securities. While reasonable care bas been ta
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