Seoul: Korea Gas Corp. (KOGAS) announced on Friday that its second-quarter net profit experienced a significant decline of over 66 percent compared to the previous year. This decrease is primarily attributed to weak operating profits resulting from lower interest rates and increased utility rate subsidies for low-income households.
According to Yonhap News Agency, KOGAS's net profit for the April-June period stood at 85.1 billion won (US$61.3 million), marking a 66.4 percent drop from the previous year. During the same period, the company's operating income decreased by 13.1 percent year-on-year to 404.6 billion won, despite a 1.9 percent increase in revenue to 7.63 trillion won.
The company's earnings fell short of market expectations, as analysts had projected an average net profit of 150.3 billion won, based on a survey by Yonhap Infomax, the financial data arm of Yonhap News Agency. The decline in operating income was largely due to a decrease in the return on investment from wholesale supply, which was impacted by falling interest rates.
KOGAS also noted that the increase in gas bill subsidies for low-income households contributed to the weakened operating profit. Despite these challenges, the company reported a 14.8 percent reduction in accumulated debt, bringing it down to 6.9 trillion won in the second quarter, as a result of its efforts to enhance financial stability.