[Interpreted]Now let me begin with an overview of our earnings results, first in Korean and repeated in English. [Foreign Language – Korean] [Interpreted] Now we will provide the overview in English starting with the operating income. In the second quarter of 2012, KEPCO reported a net operating loss of KRW1.96 trillion, the amount of loss of which increased KRW1.76 trillion compared to operating loss of KRW798 billion in 2011. Deterioration in operating gloss was mainly due to increases in operating expenses, such as fuel cost and power purchase cost, which were not fully offset by increases in operating revenues from increase in power sales revenues due to tariff hikes, and increases in power sales volume. Taking a closer look, operating revenues increase 16.4% to KRW10.6 trillion, power sales revenue increased 16.7% totaling in KRW9.9 trillion. This increase was attributable mainly to 10.5% increase in unit tariff, 2.6% growth in power sales, driven by increase in demand from the industrial sector, as well as recognition of account receivables related to the fuel cost adjustment system. Moving on to main operating costs, COGS, selling and administrative expenses went up 25.9% to KRW12.7 trillion. Fuel costs accounted for the major reason of the jump which went up 30.1% to KRW6.3 trillion, primarily due to 2.3% increase in power generation volume, affected by increased power demand and 2.1% and 29.3% hike in unit cost of fuel costs such as coal and LNG respectively. Meanwhile, purchased power cost surged 95.5% to KRW2.9 trillion. Such rise is attributable to 35.6% increase in unit cost of purchased power and 17.7% hike in purchased power volume due to rising power demand. Now let me explain KEPCO’s financial income and expenses in the non-operating segment. Our net financial loss stood at KRW492 billion in the second quarter of 2012, which slightly improved compared to KRW511 billion loss in 2011. This was mainly a result of increases in net FX related gain including translation and transaction related gain and increases in financial derivate gain. The interest expense was up 3.8% to KRW575 billion. Due to increased amount of pretax loss in 2012, income tax expense increased minus KRW374 billion from minus KRW223 billion in 2011 to minus KRW597 billion in 2012.
As a result of the foregoing, we recorded consolidated net loss of KRW1.78 trillion in 2012, the amount of loss increased by KRW698 billion, from net loss of KRW1.09 trillion in 2011.This concludes the overview of KEPCO’s earnings results for the second quarter of 2012. [Foreign Language – Korean] [Interpreted] Now let me move on to the Q&A session. I'm joined with KEPCO's IR committee members in charge of finance, tariff, et cetera. We are prepared to take any questions. [Foreign Language – Korean] [Interpreted] Since we will proceed in both Korean and English, all the questions will be translated. So please ensure your questions and answers are brief. [Foreign Language – Korean] [Interpreted] Please begin. Question-and-Answer Session Operator [Foreign Language – Korean] [Interpreted] Please begin. Now Q&A session will begin. (Operator instructions) Operator [Foreign Language – Korean] [Interpreted] The first question will be given by (inaudible). Please go ahead sir. Unidentified Analyst [Foreign Language – Korean] [Interpreted] So I have two questions. This question is, what is the amount of account receivable you have accumulated until the second quarter of this year. Second question is, what is the time lag between the actual fuel cost and the market price of a spot commodity. Cecilia Oh [Foreign Language – Korean] [Interpreted] So in the second quarter that is from the April to June of this year, the cumulative account receivable from the cost system is KRW618.5 billion. [Foreign Language – Korean] [Interpreted] Next is, answering your second question. Chang-Keun Shin [Foreign Language – Korean] [Interpreted] My name is Chang-Keun Shin from (inaudible). To answer your second question, I will base my number on the purchase unit price of the cumulus core for the first half of this year which is at $120.47. This level is mix of long term and short term purchase price is significantly different from international stock price but generally we can safely say that there is about $2 to $4 gap. Read the rest of this transcript for free on seekingalpha.com