South Korea's finance ministry said Friday that 18 state-run companies were rated "lackluster" or below during its annual management assessment, noting it plans to order such firms to cut bonuses and take corresponding measures.

Under the comprehensive performance evaluation of 130 state-run companies, which divides them into six tiers, 14 were labeled "lackluster," according to the Ministry of Economy and Finance.

The other four, including the Korea Railroad Corporation, got the lowest evaluation of "extremely lackluster."

South Korea's state-run utility firm Korea Electric Power Corp. was among the companies that had received a lackluster grade, the report showed. Korea Gas Corporation received an average grade.

In 2022, KEPCO reported a record operating loss of 32.63 trillion won ($25.67 billion), more than quadruple from a year earlier due to limited electricity rate hikes amid high inflation and an economic slowdown.

In an effort to address its financial woes, the state utility company put forth a set of reform measures, such as property sales, restructuring overseas businesses and freezing workers' wages.

The government also decided to cut the bonuses of executives in nine state-run firms with fragile financial conditions, including Korea Hydro & Nuclear Power Co. and other regional power firms. KEPCO was also already excluded from companies eligible to receive bonuses for getting a lackluster "D" grade.

On the other hand, 19 companies were classified as "outstanding," followed by 48 firms as "satisfactory" and 45 others as "average."

No companies received the top evaluation.

The government has been making efforts to tighten the belts of public firms amid economic uncertainties.

"The evaluation is primarily aimed at assessing the progress made by public firms in restructuring their roles, structures, workforces and budgets, which has been a key objective of the Yoon Suk Yeol administration," Finance Minister Choo Kyung-ho said in a statement.

Choo noted the government especially focused on checking the fiscal health of such firms to address public concerns.

The government will review dismissing the heads of five organizations that have received lackluster grades for two consecutive years, excluding those who have served for a short period, the minister said.

The five companies are the Korea Health Promotion Institute, Korea Construction Equipment Safety Institute, Korea Veterans Health Service, Korea Fire Institute and Korea Energy Technology Evaluation and Planning. (Yonhap)