6-K 1 d6k.htm FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the Month of September, 2006

KOREA ELECTRIC POWER CORPORATION

(Translation of registrant’s name into English)

167, Samseong-dong, Gangnam-gu, Seoul 135-791, Korea

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will

file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F X Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in

paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in

paper as permitted by Regulation S-T Rule 101(b)(7):

Indicate by check mark whether the registrant by furnishing the

information contained in this form is also thereby furnishing the

information to the Commission pursuant to Rule 12g3-2(b) under the

Securities Exchange Act of 1934.

Yes No X

If “Yes” is marked, indicate below the file number assigned to the

registrant in connection with Rule 12g3-2(b): 82- .

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

By: |  | /s/ Kim, Myung-Whan
Name : |  | Kim, Myung-Whan
Title : |  | General Manager
|  | International Finance Department

Date: September 21, 2006

Investor Presentation

September 2006

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 has been taken to ensure that the information contained herein is not untrue or misleading at the time of preparation, the company makes no representation as to its accuracy or completeness.

Certain statements in this presentation, including estimates and forecasts, include forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of forward- looking terminology, such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “project” or “continue” or the negative thereof or other similar words. All forward-looking statements involve risks and uncertainties. Actual results may differ materially from those discussed in, or implied by, forward-looking statements. The forward-looking statements speak only as of the date of this release and KEPCO assumes no duty to update them to reflect new, changing or unanticipated events or circumstances.

KEPCO

KOREA ELECTRIC POWER CORPORATION

Table of Contents

I. Overview

II. Business & Operations

III. Financial Profile

IV. Industry Restructuring

KEPCO

KOREA ELECTRIC POWER CORPORATION 2

I. Overview

KEPCO

KOREA ELECTRIC POWER CORPORATION

Power Monopoly in Korea

95% 100% 100%

Transmission Generation Distribution

* Based on gross generation (1H 2006)

Assets KRW 74.7 trillion (USD 74.0 billion)

Revenues KRW 25.4 trillion (USD 25.2 billion)

Generating Capacity 57,204 MW

Market Capitalization KRW 22.6 trillion (USD 23.8 billion)

Credit Rating A1(Moody’s), A(S&P)

Assets & Revenues : as of December 31, 2005 (Consolidated, audited)

Generating Capacity : as of Jun. 30, 2006

Market Cap.: as of Jun. 30, 2006, USD/KRW=948.9

KEPCO

KOREA ELECTRIC POWER CORPORATION 4

II. Business & Operations

KEPCO

KOREA ELECTRIC POWER CORPORATION

Demand Growth

Historical Demand Growth & GDP (%)

Demand Growth

GDP Growth 11.8

Sales Volume

8.5 7.6 8.0

Demand Growth Forecast

2007 : 4.3% 2008 ~ 2011 : 3 – 4%

6.5 5.4 5.9 6.3 3.8 7.0 4.0 3.1 4.6 5.0

Forecast value for 2007 onward by MOCIE & KPX

Actual results may differ from the forecast

2006 2005 2004 2003 2002 2001 2000 (Unit : 1,000 GWh)

Sales Volume

332 312 294 278 258 240 352

Demand Growth for 1H 2006 (yoy)

Unit Sales Price

Volume Revenue

1H 2006 1H 2005 (Won/kWh)

85.1 87.5 Residential 9.5% 9.1% 9.9% 7.4% 8.2% 93.2 91.0 6.1% Average

Commercial 5.2% 5.8% 59.7 57.7

Industrial 71.0 73.0

Overall Commercial Industrial Residential

KEPCO

KOREA ELECTRIC POWER CORPORATION 6

Tariff (1)

Formula

Cost of Debt × Debt Weighting

Fair Rate of Return + = Cost of Equity * × Equity Weighting

Net Plant in Service + Working Capital (2 Months)

Operating Income (1 - tax rate)

Actual Rate of Return ÷ =

* Cost of Equity is determined by CAPM : Risk Free Rate + Beta x Market Premium

* This formula forms a base on which KEPCO and MOCIE negotiate.

Tariff Adjustment Flow MOCIE

(Korean Electricity Commission) MOFE

Discussion Authorization

Application KEPCO

Notice & Operation

Put into Effect

1 2 3 4

KEPCO

KOREA ELECTRIC POWER CORPORATION 7

Tariff (2)

History of Tariff Adjustment

Tariff Rebalancing

6.0% 6.1% 5.9% 4.9% 5.3% 1.5% -2.8% -2.0%

Residential

4.2% 4.0% -3.5% -2.2%

Commercial

2.8%* 1.9% 0.0% 2.5%

Industrial

2.4% 1.9% -1.5% 0.0%

Average

1.9%

Mar04 Nov99 Jan03 Jun91 Feb92 May95 Nov00 Jan98 Jul97 Dec05 Dec05

* Tariffs were increased by 1.9%, while the rate of The Electric Power Industry Basis Fund was decreased by 0.9% p from 4.6% to 3.7% This resulted in 2.8% effective tariff increase

Management Strategies on Tariff Adjustments

Rebalancing tariffs among different customers to recover the different cost of supply

in a timely manner

Reclassifying commercial, industrial, and educational customers by voltage supplied

Narrowing the gap between the highest and lowest tariffs within residential customer base

KEPCO

KOREA ELECTRIC POWER CORPORATION 8

Fuel Price & Expense (1)

Fuel Price & FX trends 2004 Average

1/4 2006 4/4 2005 3/4 2005 2/4 2005 1/4 2005 2005

Average 2/4 2006 2003

Average 51.7 25.3 47.6 50.7 53.3

NEWC* Coal Price Index

47.3 39.1 47.6 52.8

USD/ton 47.9 26.8 58.6

USD/barrel 41.2 33.6

Dubai Oil Price

52.7 55.5 64.9 49.4

FX Rate*

1,191.8 1,036.6 1,029.4 1,143.7 1,024.1 976.1 1,008.1 1,022.1 949.6

KRW/USD

* NEWC : Newcastle

* FX Rate Source : Bloomberg

1H 2006 Fuel Expense

Unit Price & FX Rate Change

(1,000Won/ton,Won/liter, KRW/USD)

Fuel Expense (in billion Won)

yoy yoy 1H 2006 1H 2005 1H 2006 1H 2005

B. Coal -8.1% 57.1 62.2 -3.5% 1,208 1,252 B. Coal 4.3% 593 569

B.C. Oil B.C. Oil 369.5 262.3 40.9% 70.7% 1,428 2,437 LNG 28.7% 566.8 440.3 Nuclear

LNG -3.4% 413 399 -5.2% 962.8 1,015.3

FX Rate 26.6% 3,662 4,637 Total

KEPCO

KOREA ELECTRIC POWER CORPORATION 9

Fuel Price & Expense (2)

Strategy on Fuel Cost Saving

Maintaining optimal proportion of generation based on fuel type

Sustaining over 80% of nuclear & coal generation, above 90% utilization rate of nuclear

Securing shares of foreign mines & fuel suppliers

Re-trying direct import of LNG

Fuel Cost Mix

Generation Mix

1H 2006 1H 2006 1H 2005 1H 2005 13% 17% LNG

LNG Oil 6% 37% 4% 51%

Coal 38% 17%

Oil 38% 14% 35% 27%

Nuclear & Hydro

Coal 41% 43% 11%

Nuclear & Hydro 8%

KEPCO

KOREA ELECTRIC POWER CORPORATION 10

III. Financial Profile

KEPCO

KOREA ELECTRIC POWER CORPORATION

Capital Structure

Capital Structure

Total SH’s Equity : KRW 42.3 trillion (USD 41.9 billion)

Total Liabilities : KRW 32.4 trillion (USD 32.1 billion)

Shareholder Mix as of June 30, 2006

29.95% 24.07% 0.73% 30.26% 14.99%

KDB Government Treasury Stock Foreigners

Others 54.02% SH’s Equity 57% Liab. 43% as of Dec.31, 2005

Consolidated Interest Bearing Debt* Local Currency Debt 84%

FX Debt 16%

Total Debt : KRW 19.4 trillion equivalent JPY 34%

US Dollar 50%

Total Foreign Currency Debt

: KRW 3.2 trillion equivalent

Others 16%

* Debt : KEPCO + GENCOs, as of Jun. 30, 2006

KEPCO

KOREA ELECTRIC POWER CORPORATION 12

Debt Profile & Strategy

Debt Repayment Schedule 4.9

Total Maturing Debt FX Debt 3.7

Target Schedule 3.2 2.0 2.2 1.7

Trillion Won 0.9 0.4 0.5 0.6 0.8 0.4 0.3 0.3 0.7

2014 & after 2013 2012 2011 2010 2009 2008 2007 2006

Debt Currency Mix

Fixed vs. Floating Mix

1H 2006 Target Fixed 62% Floating 38% Total

Fixed 57% Floating 43% 84%

KRW KRW 70% 15% 8% USD Fixed 91% Floating 9%

FX 8%

JPY & Others

15%

* Debt : KEPCO + GENCOs, as of Jun. 30, 2006

KEPCO

KOREA ELECTRIC POWER CORPORATION 13

Improved Financial Status* 2003 yoy

2005 2004 2002 yoy yoy yoy

(Unit: KRW bn) 6.3%

278,451 8.0% 332,413 6.6% 293,599 5.4%

KWh sold(GWh)

312,096 23,956 5.2% 21,366 5.6% 25,445 6.2%

22,775 6.6% Revenues (3.8%) 9,953 11.3% (1.5%) 10,313 3.6%

EBITDA ** 9,916 9,769 4,467 (14.5%) 5,047 26.5% 3,922 (12.2%) 5,224 3.5%

Operating Income 1,292 (3.1%) 1,608 (20.3%) 1,014 (21.5%) 1,333 (17.1%)

Total Interest Cost *** 19,714 (12.9%) 23,477 (15.9%) 19,112 (3.1%) 22,645 (3.5%)

Interest Bearing Debt 2,883 24.1% 3,048 86.4% (16.5%) 2,323 (23.8%)

Net Income 2,408

* Based on consolidated financial statements

** Operating Income + Depreciation & Amortization

*** Interest cost is inclusive of the capitalized interest

KEPCO

KOREA ELECTRIC POWER CORPORATION 14

1H 2006 Results*

Primarily due to 6.1% demand growth, operating revenues increased by 8.5%

Fuel cost was up by 25.3% mainly due to oil & LNG price hike

Power purchased for resale was up by 59.6% due to LNG price hike & new facility added to current PPA

Maintenance cost was up by 33.9% due to an increase in scheduled maintenance for nuclear plants

Operating income decreased by 33.2% mainly due to increases in fuel cost, power purchased for resale & maintenance cost

1H 2006 1H 2005 %change (Unit : in billions of Korean Won)

Operating revenues: 8.5% 11,919 12,930 Sale of electric power 9.1% 11,670 12,728

Other operating revenues -55.2% 192 86 Revenues for other businesses 103.5% 57 116

Operating expenses: 17.9% 9,711 11,455 3,833 4,803 Fuel 25.3% 629 1,004

Power purchased for resale 59.6% 33.9% 705 944 Maintenance Depreciation 0.2% 2,456 2,461

Commission 3.8% 287 298 1,742 1,929 Other 10.7% -72.9% 59 16

Expenses for other businesses -33.2% 2,208 1,475 Operating income 789 619

Other income: -21.5% 12.9% 232 262 FX gain -49.7% 175 88

Investment income from affiliates -29.6% 382 269 Other 12.2% 607 681

Other expenses: 310 348 Interest expenses 12.3% FX loss -11.1% 18 16 1 56

Investment loss from affiliates 55.0% -6.1% 278 261 Other -40.9% 2,390 1,413

Ordinary income 820 521

Provision for income taxes -36.5% -43.2% 1,570 892

Net income

* KEPCO+GENCOs

* This financial information is preliminary, un-audited and made by adjusting for major inter-company transactions among KEPCO and its six generating subsidiaries only. As such, these financial information may not have been prepared in accordance with Korean generally accepted accounting principles, and may not necessarily be indicative of the results of operations of KEPCO and its six generating subsidiaries as a group

KEPCO

KOREA ELECTRIC POWER CORPORATION 15

Capital Expenditure

Conservative Official Forecast (in billion Won) 9,912 10,168 9,803 8,642 3,441 3,607 3,035 2,009

Nuclear Plant

Thermal Plant 1,540

Transmission & Distribution Facility

2,032 2,911 2,218 4,695 4,765 3,722 4,550 2007F 2006F 2009F 2008F

Nuclear New Capacity to be added 2,801 1,622 2,240

Thermal 1,500

KEPCO

KOREA ELECTRIC POWER CORPORATION 16

Major Financial Statistics *

Operating & Net Profit Margin

Total Borrowing to Equity Ratio

23.6% 84.1% 22.9% 18.7% 19.7% 14.3% 15.4% 59.9%

12.0% 65.1% 10.2% 9.5% 45.1% 48.6% 8.1%

2004 2003 2002 2001 2005 2004 2003 2002 2001 2005

Average Debt Cost EBITDA Interest Coverage KEPCO+GENCOs

6.3% 6.1% 9.6X 7.7X 7.7X 5.2% 6.2X 4.4% 4.7% 4.4X

2004 2003 2002 2001 2005 2004 2003 2002 2001 2005

* Based on consolidated financial statements

KEPCO

KOREA ELECTRIC POWER CORPORATION 17

IV. Industry Restructuring

KEPCO

KOREA ELECTRIC POWER CORPORATION

Industry Restructuring

Initial Plan, Current Status & Future

Current Status Plan Future Strategy GENCO setup + Sale Generation

6 GENCOs in operation, 100% owned by KEPCO

Be prepared to sell GENCOs when price is right

Management control is on for sale

Improving the asset value to get right price

All GENCOs except for Nuke & Hydro to be sold

DISCO setup was scrapped by MOCIE in June 2004 DISCO setup + Sale Distribution

Divisional System within KEPCO will be introduced

Each division will be autonomous and competitive

IPO has been delayed as the price quote was below book value

KEPCO will push forward with selling management control at the right price (at least book value)

This policy secures KEPCO’s value, and credit won’t be affected during the sale process

Sale of KOSEP Scrapping DISCO setup

Scrapped because benefits were not certain given substantial risks

This cleared the uncertainty considerably and saved the cost of DISCO setup

KEPCO

KOREA ELECTRIC POWER CORPORATION 19

Asset Sale Assets on Sale

Book Value* Ownership Plan to Sell (in billion Korean Won)

Selling management control as originally planned

KOSEP 1,986 100.0% KPS 286 100.0%

KEPID 25 49.0% KDHC 176 26.1% KOGAS 819 24.5% KOPEC 56 97.9%

Powercomm 408 43.1% Listing on domestic exchange or selling to strategic investors

Timing & method of selling is to be set in consultation with Government

Timing & method of selling is to be set in consultation with Government

Subject to Government’s plan of deregulating the gas industry

After Government’s finalization of the plan to introduce competition

into the market for designing nuclear reactors

Listing on either domestic or foreign exchange, in relation to

the bonds convertible into Powercomm shares issued in Euro market

* Book value: as of Dec. 31, 2005

KEPCO

KOREA ELECTRIC POWER CORPORATION 20