Korea Gas (036460) Q3 2024 earnings summary

Executive summary

• Revenue for the first nine months of 2024 was ₩28.41 trillion, down from ₩44.56 trillion in the same period last year, reflecting lower LNG prices and demand.

• Operating profit surged by 78.5% year-over-year to ₩1.83 trillion, driven by improved cost management and margin recovery.

• Net income turned positive at ₩815.4 billion, a significant turnaround from a net loss of ₩747.4 billion in the prior year, supported by lower interest expenses and higher pre-tax income.

• The company maintained a strong market position, supplying 100% of Korea’s wholesale natural gas market, and continued to expand its LNG and hydrogen businesses.

• City gas sales volume increased by 4.1% year-over-year, while power sales volume declined by 2.4% due to increased direct LNG sourcing by power companies.

Financial highlights

• Revenue for 3Q 2024 was KRW 28,409.8 billion, down from KRW 33,946.8 billion in 3Q 2023.

• Operating profit reached KRW 1,827.0 billion, up from KRW 1,023.8 billion in the prior year.

• Net income for the quarter was KRW 815.4 billion, a significant turnaround from a net loss of KRW 90.2 billion in 3Q 2023.

• Cost of sales decreased by 19.4% year-over-year, supporting higher operating profit.

• Cash and cash equivalents at period-end were ₩846.9 billion, up from ₩780.6 billion a year ago.

Outlook and guidance

• Capital expenditure is forecasted to rise, with total capex expected to reach KRW 1,820.0 billion in 2024 and further increases projected through 2028.

• The company expects continued volatility in global energy markets, with LNG prices and demand subject to macroeconomic and geopolitical factors.

• Ongoing investments in LNG infrastructure and hydrogen projects are expected to support long-term growth.

• Expansion plans include constructing an additional 440km of main pipeline by 2026 and increasing storage capacity.

• Management is focused on cost control, supply chain stability, and expanding new energy businesses.