KEP - Korea Electric Power plunges as government keeps electricity tariffs flat

Gargolas/iStock via Getty Images Korea Electric Power ([[KEP]] -4.7%) shares sink to their lowest in a month after South Korea's government suppressed electricity tariffs to tame rising inflation in the economy, dimming the company's earnings outlook. The government said over the weekend it would keep tariffs unchanged for the quarter starting in July even while acknowledging the company's rising costs for fuel purchases, although it would consider raising tariffs for Q4 if fuel prices continue to rise in the coming months. Expectations for Kepco's earnings to improve this year have been fading: Nomura analysts recently downgraded the stock to Neutral from Buy, expects tariffs in South Korea to rise 1.8% this year despite an estimated 16% increase in fuel costs. With Korea Electric unlikely to pass through cost increases, near-term earnings look set to decline, Opel Investment Research writes in an analysis posted on Seeking Alpha.

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Korea Electric Power plunges as government keeps electricity tariffs flat