015760.KS

• Overall Financial Performance

• All figures are preliminary consolidated IFRS results, with comparisons made year-over-year unless otherwise stated
• Total cost of goods sold and SG&A increased 2.8% year-over-year to KRW 41,404.6 billion
• Interest expense decreased KRW 132.2 billion year-over-year to KRW 2,079.1 billion
• As of end of first half 2026, consolidated total borrowings stood at KRW 133.3 trillion, with stand-alone borrowings at KRW 84.8 trillion

• Generation Mix and Power Sales

• First half 2026 power sales volume decreased 0.6% year-over-year to 266.7 terawatt hours, driven by lower industrial demand from macroeconomic slowdown
• In the first half, nuclear power capacity factor declined, reducing its contribution to the generation mix
• Coal utilization and generation mix contribution increased due to lower nuclear output; LNG generation mix contribution also rose as overall baseload generation fell
• Bituminous coal averaged $128.2 per ton, JKM LNG averaged KRW 939,000 per ton, and system marginal price (SMP) averaged approximately KRW 112.3 per kilowatt hour in the first half
• Consolidated RPS cost for the first half was KRW 2,533 billion

• Full year 2026 power sales volume is expected to see a slight increase, driven by a higher projected economic growth rate and more operating days year-over-year • Full year 2026 generation mix guidance calls for a slight increase in nuclear power contribution, a slight decrease in coal contribution, and broadly stable LNG contribution • Full year 2026 capacity factor projections: low-to-mid-80% for nuclear power, low-to-mid-50% for coal, and low-to-mid-20% for LNG • The proposed corporate/regional differentiated tariff system is expected to be finalized and introduced by the end of 2026, alongside wholesale power pricing reform • Management is committed to meeting the regulatory requirement of lowering the corporate bond issuance ratio to capital and reserves to below 2x by the end of 2027

The only core product segment disclosed is Power Sales, which generated revenue of KRW 43,964.1 billion in the first half of 2026, a 0.4% year-over-year decrease. This accounts for approximately 94.9% of total consolidated revenue. The other revenue segment, which includes overseas business, generated revenue of KRW 2,353.2 billion in the first half of 2026, a 16.7% year-over-year increase, and accounts for approximately 5.1% of total consolidated revenue. Total consolidated revenue reached KRW 46,317.3 billion, a 0.3% year-over-year increase. Consolidated operating income totaled KRW 4,912.7 billion, and consolidated net income totaled KRW 2,796.5 billion. Fuel costs rose 8.8% year-over-year to KRW 10,142.9 billion, while purchase power costs fell 0.9% to KRW 17,206.9 billion.

• Prolonged preventive maintenance for some nuclear power units has already led to weaker than expected capacity factors and lower nuclear generation contribution in the first half of 2026, creating pressure to meet full year generation targets • Global fuel price volatility, amplified by geopolitical conflict such as the ongoing Middle East tensions, creates uncertainty for fuel cost projections • Large-scale required capital expenditure for national mega projects and power grid expansion creates funding challenges alongside the regulatory requirement to reduce leverage and bond issuance levels • Macroeconomic slowdown has reduced industrial power demand, weighing on core power sales volumes • Uncertainty remains around the timing and financial impact of proposed electricity tariff reforms, including the new differentiated pricing system

Q: Nuclear power contribution has declined for 4 consecutive quarters through Q2 2026, and some prolonged maintenance has been noted at subsidiaries. Will nuclear contribution need to rise sharply in the second half to hit the full year guidance of a slight annual increase, or will full year targets be adjusted?

A: First half nuclear capacity factor was weak due to prolonged maintenance at some units, which matches the observed trend of declining contribution. Management confirms the full year target of low-to-mid-80% nuclear capacity factor remains in place. Saeul Unit 3 will be added to the grid in the second half, and preventive maintenance will be scheduled more tightly going forward to hit the full year contribution target.

Q: What drove the year-over-year increase in other operating costs in Q2 2026, and what will be the financial impact of the upcoming corporate differentiated tariff system?

A: The two main drivers of higher other operating costs are KRW 101.3 billion in incremental costs from prolonged nuclear unit maintenance at KHNP, and KRW 70.3 billion in higher material costs for coal supplied to private operators by Korea Southeastern Power. It is too early to estimate the full financial impact of the new tariff system; a public hearing will be held in the second half, with finalization and introduction expected by end 2026 alongside wholesale pricing reform.

Q: With lower global oil prices amid easing Middle East conflict, will Q3 2026 fuel costs be lower than Q2? Is a tariff hike expected in 2026, or will it be delayed to 2027? Can management hit the 2x bond-to-capital ratio target by end 2027?

A: Despite easing global oil prices, SMP (which reflects fuel costs) has risen year-over-year in July and August 2026, as the lagged impact of earlier international fuel price increases has begun to feed into wholesale prices. A tariff increase would help address accumulated losses and support leverage reduction, but inflation and macroeconomic conditions must be considered; management will work with the government to pursue a future hike. Management will make every effort to meet the 2x bond ratio target by 2027, focusing on boosting operating profit and coordinating with government on appropriate tariff adjustments.

Q: Large government mega projects require major CapEx for capacity and grid expansion, which will create significant additional funding needs alongside the requirement to cut bond leverage. What is KEPCO's plan to fund these projects?

A: These are mid- to long-term projects that do not require all capital upfront. Management will take a balanced approach, developing a multi-year CapEx plan that spreads spending across years and strictly manages existing funds. The company will work closely with the government, stakeholders, and subsidiaries to develop an optimal funding approach that avoids undermining overall KEPCO business stability.