Korea Electric Power Corp (KEP) 2008 Q4 法說會逐字稿

Good morning and good evening. First of all, thank you all for joining this conference call. And now, we will begin the conference of the fiscal year 2008 fourth quarter earning results by KEPCO. This conference will start with a presentation followed by a divisional Q&A session. (Operator Instructions). Now, we shall commence the presentation on the fiscal year 2008 fourth quarter earning results by KEPCO.

Hello, everyone. This is Seung-Bum Kim, manager in charge of investor relations at KEPCO. On behalf of KEPCO, I would like to thank you for participating in our conference call today to announce our preliminary earnings results for the fiscal year of 2008.

Before beginning the announcement, please note that the financial data to be disclosed today are preliminary, unaudited and unconsolidated estimates prepared by simply adding the earnings estimates of KEPCO and its six generation subsidiaries, or GENCOs, after adjustment for major intercompany transactions among KEPCO and the GENCOs. [Such] financial information have not been prepared in accordance with the generally-accepted accounting principles of any country and are not indicative of the consolidated results of operations of KEPCO and its GENCOs. Accordingly, these estimates should not be relied upon or form a basis of any investment decision with respect to the securities of KEPCO, including entering into any contracts for the purpose of trading any securities of KEPCO.

Now, let me briefly run through the estimated financial results and then we will open up for Q&A session. Any periodic comparison is cumulative year on year basis between 2008 and 2007. The operating revenues went up by 8% to KRW31.3 trillion in 2008 from KRW28.9 trillion in 2007. This was mainly because revenue from the sale of electric power increased by 8.4% to KRW31 trillion in 2008. In terms of power sales volume, the overall growth was 4.5%, which was mainly due to a 2.8% increase in the residential sector, 5.6% increase in the commercial sector and 4.4% increase in the industrial sector.

The average unit sales price of electricity rose by 4.2% to 4.4% -- sorry, to KRW81 per kilowatt hour from KRW77.7 per kilowatt hour. Residential sector price grew by 3% to KRW97.6, commercial sector fell by 2.4% to KRW95.3, industrial sector was up by 4.4% to KRW67.1, in each case per kilowatt-hour. The major reasons of such changes were the increase in demand for power, due to the increased use of heating using power in winter due to average temperature decrease, and oil price increases and the tariff increases effective as of January 1, 2008, and November (inaudible) respectively. This resulted in an average 9.1% increase in industrial sector tariff and a 17.5% increase in night power usage, which accounted for 25% of residential sales.

Operating expenses increased by 30% to KRW34.4 trillion in 2008 from KRW26.5 trillion of last year. Looking at the main reasons of such increase, the fuel cost increased by 48.8%, accounting for 47% of the total operating costs in 2008. Looking closely at the fuel cost by fuel type, fuel cost for LNG and coal increased by 47.3% and 95.3% respectively. On the other hand, fuel costs for oil decreased by 18.5%, mainly because 3,240 megawatts of coal power plants were newly constructed and the amount of oil consumption decreased by 46.4% due to the rise of oil price globally. In terms of unit fuel cost, unit cost for coal increased by 66.4% and LNG increased by 59.2% respectively.

Cost of power purchased from IPPs increased by 71.1% to KRW4.4 trillion in 2008 from KRW2.3 trillion in 2007. This is mainly due to a 19.7% increase in the volume of power purchased and a 42.9% increase in unit purchase price. Such IPPs include independent power producers participant in the power pool market as well as IPPs that have power purchase agreements with KEPCO.

Maintenance costs increased by 3.5% to KRW2.3 trillion in 2008. Parent KEPCO's maintenance cost accounts for 37% of the total maintenance cost, decreased by 10.1% mainly as a result of cost saving measures in response to rising fuel prices and (inaudible) financial difficulty. On the other hand, the maintenance cost for the six GENCOs increased by 13.6% due to increased [new offering] maintenance cost for five GENCOs except for KHNP.

As a result, net operating income decreased substantially, [showing] a KRW3.1 trillion loss in 2008 as compared to KRW2.5 trillion profit in 2007.

Non-operating income increased by 140.3% (sic) to KRW2 point trillion (sic) from KRW1.1 trillion. This was mainly due to a 7.6% increase in investment income from affiliates to KRW318b in 2008 from KRW296b in 2007, as well as a 169.1% increase in other non-operating income, mainly consisting of derivatives valuation gain, which was due to the depreciation of won in 2008. Foreign currency valuation gain was up by 776% to KRW219b from KRW25b.

Non-operating expenses increased by 194.2% (sic) to KRW3.7 trillion (sic) in 2008 from KRW1.2 trillion in 2007, mainly due to a substantial increase in foreign currency valuation loss from KRW143b to KRW2.1 trillion, and 32.6% increase in interest expense to KRW1 trillion. The significant increase in foreign currency valuation loss was mainly due to 34% of won depreciation against the US dollar in 2008, as compared to 1% of won depreciation against the US dollar in 2007. Total interest-bearing debt amounted to KRW27.1 trillion at the end of 2008. This was a 27.2% (sic) increase from KRW21.3 trillion at the end of 2007.

As a result of aforementioned factors, the unconsolidated combined net loss of KEPCO and the GENCOs was KRW2.9 trillion in 2008, which was down substantially compared to net income of KRW1.5 trillion in 2007. This concludes our earnings presentation for the fiscal year of 2008. And now, we are open to your questions. This Q&A session will be held by our new Treasurer, Mr. [Sankyo Lee].

Now, Q&A session will begin. (Operator Instructions). The first question will be given by (inaudible) from UBS. Please go ahead, sir.

Yes, hi. Thank you very much for the call. My question is regarding your CapEx and your debt levels. How much CapEx are you [leveraging] for 2009? Also, what do you expect your debt levels to be by the end of this year and are you concerned about your funding cost increasing?

Thank you very much for participating this meeting. My name is Sankyo Lee and I was transferred to this new position as of January 14. And I reviewed the KEPCO's 2008 income and [those] statement, but this information is consolidated, but not audited or not fully prepared yet, so please understand that. I think at least in a month, we will give you definite figures about our consolidated statement.

Answering the first question about CapEx, last year, we invested KRW10 trillion and, this year, we are expected to make an investment of KRW12.9 trillion. And our debt ratio target by the end of 2009 would be a little over 15%. And about the funding, I would like to say that we will heavily rely on local funding instead of borrowing debt from foreign countries. But I think there are some necessity for us to borrow some foreign currency and our debt level at the end of this year would be about KRW37.1 trillion. Thank you.

Thank you.

The following question is by Pierre from Citigroup. Please go ahead, sir.

Hello, good afternoon. I am Pierre Lau from Citigroup. I have three questions. The first one is what do you expect the electricity sales volume (inaudible) in 2009? The second question is what do you think of the percentage of [output] supplied from IPP in 2009? And the third one is -- you have a nice amount of non-operating income under other items in 2008. Would you mind explaining what's the reason why? Thank you.

Okay. Just a moment. Okay. I would like to ask you (technical difficulty) because the reception not good. But anyway, I kept the question, so I'd like to answer right now.

Okay.

Okay. So first question, you asked about [growth] demand in 2009. Our assumption, based on GDP growth of 2%, we expect our annual sales growth will be 1.8% compared to 2008. But recently, there are some [reports] that we will show a negative GDP growth rate. Actually, in the last month of last year, in December, we made a negative sales growth of 0.1%.

And when considering all the respective, I think there will be a strong possibility that we might record maybe a negative sales growth of several months in the beginning of the 2009. But I think, as the economic crisis mitigates in the second half, I think there will be positive sales growth. So in conclusion, I would say the 1.8% sales growth, we will be a little down, because we made this calculation based on what is the high prospect of GDP growth of 2%.

Your second question, the question of IPP, currently, we purchase from IPP in two ways, via PPA, power purchase agreement, and also buying power from electricity exchange market. So it adds up to about 7% IPP and PPA are tied half and half. I think that there will not be any big increase in 2009 in the purchase of power from IPP, so the proportion of IPP in 2009 will be a little down or similar to this year.

And the third question, the -- in 2008, in the first three quarters, we made a cumulative slight loss, about KRW0.78 trillion, but most -- over KRW2 trillion net loss was happened in the last quarter, because there was a big devaluation of the won against the dollar that caused our price [for the] power very [steeply] and it was discontinued now. So we are now considering the raise of the tariff schedules and also we are expecting the high won/dollar ratio would be a little down in the second quarter. We are now trying our best to save costs and also we are now trying to make early effort of appealing to the government to adjust our tariff schedules considering our big loss in 2008. But I think the most key factor will be the foreign exchange rate.

This is my question. If you have any follow up questions, please don't hesitate [to ask] later. Thank you.

Okay. I'm sorry, my last question is, in 2008, we have KRW2.196 trillion non-operating income under the item called other. Would you mind explaining what that item stands for?

Okay, hold on. Okay. In 2008, we made a loss of KRW0.27 trillion in extraordinary revenue [which we] composed of mainly because of the loss of the financial derivative, which is about KRW0.158 trillion, and also some other (technical difficulty). Is this enough for you to answer the question?

I'm sorry, my question is, for 2008, you have one item called others under non-operating income. The number is KRW2.196 trillion.

Okay, okay.

So I just --

Okay, hold on. The major item is a financial derivative related gain. This is KRW0.1222 trillion. I think that depends on the financial derivative. You can see on the chart. Thank you.

Thank you.

Currently, three participants are waiting with their question. The following question is given by Ajay from JP Morgan. Please go ahead, sir.

Thank you so much for the presentation. A few questions from my end. The first question is regarding this news about the Korean coal settlement last night with the Australian company (inaudible) at $70 versus news flowing in on Bloomberg talking about your long-term coal settlement at $90. If you could just give us some comment specifically on the $70 (inaudible) and some clarity on that.

My second question is if you could give us some clarity if we could possibly see more tariff hikes and possibility of a [CapEx cutback]. My third question is regarding a DPS payout position. Could there still -- anything for this year? And my fourth question is regarding your January demand. You mentioned in the conference call that you've seen negative growth in December of 0.1%. Would you be able to share any numbers for the demand growth we have seen in January as well? Thank you.

Okay. Okay. I will give you answer about your four questions. First, the reason why we are not participating in the (inaudible) increase in the (inaudible) in Australia because the amount of securing coal was not so substantial. That's the reason why we are not participating in the project, as I said, due to the small amount of the coal.

And the second one, we don't expect significant decrease in our CapEx forecast. Here, we are suffering now from -- we expect to suffer from net loss if we don't increase electric tariff or there is a decrease in the won/dollar ratio. So I think (inaudible) [this is] our CapEx expectation and maybe the -- if there is a decrease, I think that will be about 10% to 20%, so about 80% to 90% of the total CapEx, the KRW32.9b, will be expensed in the 2008 -- 2009.

The third question, dividend payout, currently, we are not thinking about dividend payout internally, but we should negotiate with the government in the next couple of weeks, so it will be decided at least by the end of this month. So I think we made a big loss in last year, so this year there will be no payout of dividend by the Company policy, but I think it should be finalized by the negotiation with the government.

About the fourth question, in January, actually, we made a little negative -- we are not -- we did not receive the definite figure yet, but we made a little slight (inaudible) decline, negative growth, but it's not significant. But to the economic sluggishness, together with the a bit higher won/dollar ratio continues, and then that will affect January [demand], especially maybe industrial sector and the business sector. That would give us another [aspect] in the growth rate in the next couple of months.

But I think there will be not -- there will not be a significant decrease in the sales growth rate and we expect the sales growth will be [resolved] in the second half. Currently expecting a 1.8% [sales] increase, but now we are reviewing it again, according to the new -- using the new assumption. So I think it will be -- take about a couple of months to finalize our new sales growth forecast for this year. Anyway, I think in the first half (inaudible) last year, there will be a strong possibility that we will record negative sales growth. Thank you.

Okay. Thank you so much, but just to clarify on the first question regarding the coal transaction, you said you are not part of the deal because it's a small transaction. Could you also clarify regarding the long-term -- the pricing that we could see in terms of your contract coal price for 2009? Thank you.

Just a second. Well, actually, our generation subsidiaries make three month, six month, even one year contracts. But currently, the coal prices are going down, so we are a little more dependant upon the procuring -- the spot price, for example, from [$82 to $73] and the subsidiaries are now (inaudible) on the long-term. On the short term, there will not be any significant increase in coal price, so I think they will be a little more dependant on the spot price, but they are thinking about securing the long-term contract. But currently, we don't have any [overseas nature -- overseas mind].

And actually, the subsidiaries individually purchase instead of the joint purchase. They are making a strategy of -- between mid term and short term strategy. So on the long term, I think we better ask them what (inaudible). Currently, they are now considering various scenarios, so if you give us your email, then we will ask them the exact strategy and let you know. But currently, our strategy is not changed too much compared to last year. Thank you.

I'm sorry. The reason for the question was just to understand better because there's been news about a long-term contract at $90 on newswires as well. So I just wanted to ask is this something which has not been done yet? Have you not closed out your contracts -- your forward contracts on the coal prices or is that still being decided upon?

Okay, just a second. I think recently, there was a decrease in -- decreasing trend in the coal price. I think the subsidiary made [about] a long-term contract at maybe $90, but our long-term contract prices will be going down now, we expect. Is that enough for your question?

Okay.

Thank you.

The following question is by Henry Cobbe from Nevsky. Please go ahead, sir.

Hi there. Thank you very much for the call. Sorry to continue on the same theme, but there's a lot of interest in it. Just the January discussions with the Australian coal miners, can you say what the weighted average contract price was agreed at for your generation subsidiaries? And there's news saying it was somewhere between $73 and $75 a ton, so would you be able to confirm what the weighted average number is?

Okay. Well, maybe to your little dismay, we don't have the data at hand yet now. I think the spot price is about $78 or so today, so if they make a long-term -- the contract, the (inaudible) per ton is a little lower than $78. So about $73 to $75 would therefore be the price of the long-term price for --

Sorry, $70 to $73 was the number.

No, we are -- yes, but we expect -- we are thinking so.

Okay. And what percentage of volumes will you be buying on contract and what percentage will you be buying on spot?

Now, we -- they say that they increase [to] about 20% to 30% on spot purchase.

Okay. And do -- how does it work with the coal purchases? Does each of the generation subsidiaries negotiate separately with the coal producers or is there an integrated negotiation approach?

It depends on the situation. If the counterpart wants to have an individual contract and we have no option to make a joint deal. But generally, we are trying to make a joint deal. It is more competitive. But we don't find any significant difference in price if we buy jointly or individually. So anyway, our company's [better] to make the maximum synergy of a joint purchase, but some countries, like China, we made several experiences of a joint purchase. Anyway, our CEO has (inaudible) policy of forcing down through joint purchase, but it depends on the market situation and the counterparties. But anyway, there are no significant difference at the time. Thank you.

And how much is currently -- what volumes are currently being negotiated in the discussions with the Australian miners?

Just a second. We heavily rely on Australian coal, which accounts about 35%, and the second would be the [Indonesia]. And we have some technology of mixing different coals. So currently, I would say your answer is that about 35% is secured from Australia.

Okay. Okay, so I can work that out in millions of tons. And is the contract that you're negotiating -- is -- would that be for one year's supply or how many years' supply is being currently negotiated?

With the Australian miners?

Yes.

Well, the long-term -- the contract portion of the purchased coal from Australia is around about 70% and I think -- I know that every year they negotiate the price. So you just better understand that we have bought in 35% from total demand from Australia and the [import amount accounts] that 75% long-term -- 70% long term, 30% the short -- short term.

I see, so 70% of 35% of your coal volumes is the contract size.

Yes, yes.

Okay. And just on a separate matter, are you giving any guidance for revenues and operating profit? Or are you going to state what's in your budget for -- what's your assumption for the Korean won and dollar rate and the average coal price per ton for the whole business and crude oil? Are you going to publish your usual annual forecast?

Okay, I'll give you an answer shortly. Wait a second. Okay. At the end of last year, we made assumptions which comprised $70 -- averages $70 oil per barrel and $100 coal per ton and won/dollar exchange rate KRW1200. And that will come to a net loss about KRW2.7 trillion without increase of tariffs.

Okay. And -- okay. And for operating profit?

It was not operating profit. This was the net profit.

Okay. And what will be the forecast for operating profit based on those assumptions?

Well, just a second. Okay. We'll bring the budget forecast material shortly and, in the meanwhile, I will just say that we made a new team to completely review the whole process from the zero ground, because there is still -- we are still seeing a high won/dollar ratio and a little lower coal price (inaudible) fuel price. And we are now investing more than half -- of up to 50% investment to make the -- [vitalize] the economic situation here in the first half. So a new result will come out maybe in a couple of months.

But the question the operating loss will be -- just a second, please. About KRW2.05 trillion in the operating profit.

Okay. And sorry, one assumption I missed was what's your estimate for the average LNG price in Korean won per ton, including the supply margin?

Well, we don't have the future -- the price of -- LNG price currently, we -- just a second. Our purchase price LNG from gas corporation in 2008 is about KRW1.25m, but it was decreased to January -- in January to KRW0.96m and in February we expect it further down, KRW0.86m per ton. But in the annual forecast, we don't have any (inaudible) material, but we want to get those kind of material by the end of completing our consolidated statement by the end of this month.

Okay. Just very finally, on -- well, two last questions. Firstly, on Powercomm, what is your plan for the -- your stake in Powercomm? Are you looking to sell it this year, your stake? What's the plan now that it's listed? And very lastly, if there are negotiations [with government with] tariff hikes, when do you expect them to be finalized?

Okay. We still have not decided any definite schedule of sale of our stake in Powercomm, to maximize our -- the revenue. Well, Powercomm -- the LG Powercomm is now starting to improve their management and increase their corporate value. So we are now watching their activities and also the market situation and also the industry situation. So we still did not decide what point of time we are going to sell our stake in the LG Powercomm. Thank you.

Okay. And on tariffs?

The following question is by Geoff from CLSA. Please go ahead, sir.

Okay. Hi, thank you. Yes, thank you for the call. Just quickly on your debt level, you mentioned KRW37 trillion as your end of -- your debt. That seems like quite a big jump in annual -- is that -- so you're saying that the loss -- that would be factoring in a loss of KRW2.7 trillion as your initial budget or --? What gets you to that KRW37 trillion?

Okay, hold on. The -- well, the -- our loan, [maybe] financing as a loan, will be this year about $37.1 trillion (sic). Anyway, we have -- we think that we need a lot of investment money in constructing a nuclear power plant and our -- the report of making possible a net loss of KRW2.7 trillion, internally we are making a strategic plan to make it to the plus side, which is very strategic. And we cannot say definitely what kind of activities will be followed, but the foreign exchange rate and also rate increase should be followed to make debt much low, so into -- reduce significantly or make it positive side. Anyway, we're announcing a very -- a strong effort by the special team.

Also, the CapEx, the increase in about KRW10 trillion is a KRW13 trillion investment minus depreciation, KRW5 trillion, so -- and also a net loss, KRW3 trillion -- KRW2.7 trillion, that would come to an end about need more money as a loan, about KRW10 trillion. But if the economy turns around and the government is considering the tariff increase to making -- those make up and maybe possibly a fuel [re-pricing] system. So we are now trying to make that -- those expectation to reduce it significantly, or even to the positive side, but I cannot say for sure. And I think you'd better watch it, maybe, time by time. So the government policy is a strong -- a crucial factor for us to make our operating profit [parent] normal. Thank you.

Okay. And also, does the weak won -- is that affecting your CapEx? In other words, are you buying a lot of US dollar based equipment or --? Like, does a weak won make your CapEx budget go up?

Just a second. Well, we don't expect any significant increase in CapEx, maybe than the needed money, even if the depreciation -- appreciation, sorry, appreciation of the won value is realized.

Okay, okay. That's it from me, thanks.

The following question is given by Ajay from JP Morgan. Please go ahead, sir.

Yes, thank you so much. Just to clarify a couple of points that were raised earlier. Coming back to the (inaudible) Australia deal, just wanted to confirm -- you mentioned the small amount of coal. Could you mention the quantum involved there? And also, just to confirm my understanding, you mentioned that KEPCO would not be participating, but it is part of the Korea East-West Power Corporation agreement.

Then, second question was, you also mentioned earlier about the possibility of a 10% to 20% CapEx cut. I wanted to just confirm that one as well. And the third question is regarding the tariff hike, if you could give us some color on the timing and quantum for that. And since you mentioned the continuous loss making, can you say something on that one? Thank you.

Hold on. According to our call with the relevant manager of the East-West Power, they just said that the reason why they are not participating in the coal mine stake is that the quantity is not so substantial for them. And, well, we need to make a further question to know in detail. Anyway, the major reason is that the quantity of the coal (inaudible) East-West Power.

The third -- the -- skipping the second question, the third question, the tariff adjustment. It's a very important matter because the government thinks that the economy is in the negative growth rate. Now, they are recognizing the possibility of [still] recording negative growth. So that also makes the position of the government to make a tariff adjustment a little tougher.

But since the loss of KEPCO is getting bigger and we are trying to talk with the government -- and the government also recognizes there is a strong necessity for adjusting tariff in two purposes. One is to reduce the loss of KEPCO and the second one is to reduce the consumption of the economy -- the consumption of the electricity more rationally. That probably also has a [consensus] of the increasing tariff and there is very few people to oppose a tariff increase.

But I think maybe in time there should be some measures to correct -- to make -- to narrow the loss or make even secure some kind of the investment return. So I would not -- I could not say what the time, but very shortly, but it will take a little time. But I'm afraid of the economy getting worse. But KEPCO is now making a strategic plan, as I said, to reduce that very significantly.

Well, I clearly didn't understand your second question. To my understanding that you asked about our [reducement] of the 20% of the investment. But I think our expectation is to reduce or delay the investment, about 20% of the investment, considering our [profit and] loss of this year. Is it enough for your question?

Just to actually clarify on that front, then, you mentioned about a delay of 20% of the investment. But can you see further CapEx cuts likely or is that something -- given the fact that demand has also been slowing down over the recent months, is that something which we could see you going on a cutback on CapEx or it's just going to be a slight delay of 20% as you mentioned?

Okay. I will give you the some other information about that. Our CEO knows very well about making a big loss this year. So we are now securing various ways of creating extra cash, utilizing our land or buildings for the redevelopment and these kinds of [revivement] of the (inaudible). So we are now moving very actively to make extra revenue.

And there is some possibility of adjusting the cost structures schedule. It's a matter of our -- [it's a matter] of the decision of the subsidiaries, mainly KHNP, Korea Nuclear and Hydro Power plant Company. And there are a lot of ways now being discussed by a new special taskforce team to make -- to reduce the loss very significantly. We call it our strategic plan -- strategy plan to make it smaller.

So the -- some main activities are the tariff schedule adjustment and also the environment factors like falling exchange rate and fuel price decrease. And since we (inaudible) conservatively and (inaudible) making extra cash utilizing our -- the idle assets. And also, we are now cutting every small money, the -- cutting (inaudible). So anyway, it will come out very soon, so we expect there is some big expense reduction in size. But we don't clearly say about the factors uncontrollable, like foreign exchange. Thank you.

Okay. I'd just like to clarify on the first point of the coal aspect. You said East-West is not participating because the quantum is smaller. And this is just a follow-up, because you have talked about numbers of $73 to $75 on the contract coal pricing. Where my question is it seems that you are also seen on Bloomberg reporting about the $90. Just wanted to repeat this question, but understand the timing of your contract coal pricing and the expected pricing we can see on that.

Well, you repeat that question. We don't have any specific information why the East-West Company have made the contract coal at $90, even the market price a little lower. Why don't you give us the opportunity to explain it maybe later through email or by telephone after we get the information?

Okay. Thank you.

The following question is by (inaudible) from UBS. Please go ahead sir.

Yes, hi. Thank you. I just wanted to follow-up on a previous question. You mentioned that you're forecasting KRW2.7 trillion net loss this year based on (inaudible) assumption. Are there any sensitivities that you could share with us, for example, how much impact the earnings would have when the won changes or when the fuel prices (inaudible)?

Okay, just a second. We have the information. Well, it was a little revised further, but [I think you can this] information as forecasting our -- the business [result]. If there is KRW100 change in the foreign exchange, maybe an increase, KRW100 increase in won/dollar rate, we expect the expense would be about KRW1.4 trillion. And because that maybe can be (inaudible) down, mainly for fuel price, the coal, KRW0.515 trillion and heavy oil KRW0.184 trillion and LNG KRW0.702 trillion.

That would [count in the] end about make a loss expense of KRW1.4 trillion. Formerly, we expected about KRW1.2 trillion, but recently our -- the calculated adjustment is about KRW1.4 trillion if there is a KRW100 increase in foreign exchange. Also, you can think it the reversely. If the won/dollar rate goes down KRW100, we make that much less, that expense. Thank you.

Okay.

[Is there more?]

No. Currently, there are no participants with questions. (Operator Instructions). Currently, there are no participants with questions. (Operator Instructions).

If not, I think, we -- our site is open for you and you know how to contact us. So if you have any questions about our financial position or our business result or our business performance in 2009, please don't hesitate to contact us. And I just transferred to this department [three] weeks ago. And I think the [reform is calling] at KEPCO and the CEO is also keeping first priority on making profit or reducing loss.

So you'd better watch see how we are going on and what kind of factors you better know -- you well know, so exchange rate and the fuel side. And you also know our assumptions, so (inaudible) the market you will get more better information about our business performance in 2009. And we'll make a little more active IR activities to affect more the concern from investors. And please give us a little time to finalize our consolidated statement and financial notes that will include more clear information about our Company.

Thank you for joining us at this meeting today and I want to keep in touch with you more frequently at any time in the future. Thank you very much. And also apologize for us not having detailed information about subsidiary companies [on a few] matters. We will [consider] that and be better prepared for next meeting.