Semirara Mining and Power profit down 8% on lower coal contributions

SEMIRARA MINING and Power Corp. (SMPC) posted an attributable net income of P3.1 billion for the third quarter (Q3), down 8% due to lower contributions from its coal business amid stabilizing market prices and higher operating expenses.

“As anticipated, stabilizing market prices exerted pressure on our margins,” SMPC President and Chief Operating Officer Maria Cristina C. Gotianun said in a statement on Wednesday.

“Our third-quarter results also reflect the seasonal impact of the rainy season on coal shipments and electricity prices, both of which we were able to partially offset through focused cost management and operational efficiency initiatives,” she added.

Revenues grew by 10% to P13.08 billion, fueled by higher coal and electricity sales but tempered by lower selling prices, according to the company’s quarterly report.

Operating expenses, on the other hand, rose by 28% to P1.2 billion, due to plant maintenance, higher taxes, insurance premiums, and office renovation costs.

From the coal segment, the company was able to produce three million metric tons (MT), higher by 7% on a low-base effect following the near-depletion of the Molave mine and pre-stripping activities in the Narra mine last year.

Total shipments climbed by 16% to 2.9 million MT on stronger export demand. Foreign shipments more than doubled to 1.1 million MT, driven by higher sales to China.

SMPC’s coal average selling price, however, dropped by 15% to P2,811 per MT due to the normalization of coal indices and increased shipments of lower-grade coal.

In its power business, the total average capacity during running days rose by 23% to 755 megawatts (MW), following the restoration of SEM-Calaca Power Corp. Unit 2’s dependable capacity to 300 MW on May 27, along with reduced deration in Southwest Luzon Power Generation Corp. plants.

The total gross generation climbed by 12% to 1,308 gigawatt-hours. More than half of the generated electricity was sold to the spot market, with the remainder sold under bilateral contract quantities.

The overall average selling price of electricity was relatively flat, from P4.81 per kilowatt-hour (kWh) to P4.80 per kWh, due to the combined effect of better selling prices from bilateral contracts and weaker spot market prices.

For the six months ending in September, SMPC booked a net income of P15.71 billion, marking a 31% decline due to weaker selling prices and higher total cash and non-cash costs. This was attributed to increased coal and power sales volume.

Revenues during the period fell 12% to P49.67 billion, while operating expenses jumped by 16% to P3.41 billion.

“For the remainder of the year, we expect coal and electricity prices to remain stable. Our focus is on meeting our coal production target of 16 million metric tons and achieving a balance in our contracted generation capacity mix,” Ms. Gotianun said.

At the local bourse on Wednesday, shares in the company fell 0.78% to close at P31.70 each. — Sheldeen Joy Talavera