Easing coal, power prices gnaw on Semirara profit

Semirara Mining and Power Corp. (SMPC) continued to post weaker financial results due to lower coal and electricity prices, with its net profit declining by 33 percent in the first half.

In a statement on Monday, the company said earnings stood at P8.4 billion, lower than the P12.6 billion booked a year ago. Income from the coal and power businesses fell by 42 percent and 16 percent, respectively.

In the second quarter, SMPC net income also dropped by 33 percent to P4.1 billion from P6.1 billion.

Coal production improved by 8 percent to 5.6 million metric tons (MT) from 5.2 million MT in the second quarter. Total shipments were steady at 4.6 million MT.

However, its average selling price for coal fell by 20 percent to P2,223 per MT from P2,780.

During the period, the average Newcastle Index—the benchmark price for seaborne thermal coal in the Asia-Pacific region—fell 26 percent year-on-year to $100.5 per MT. The Indonesian Coal Index 4 also decreased by 16 percent to $46.4 per MT.

Its power business, meanwhile, saw better sales with a 17-percent growth to 1,435 gigawatt hours (GWh) from 1,228 GWh on higher plant availability.

About 56 percent of the energy sales had been sold to the Wholesale Electricity Spot Market, it noted.

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Despite the improvement in sales volume, the average selling price was cheaper by 19 percent to P4.51 per kilowatt hour (kWh) from P5.58 per kWh.

The prices of power traded at the spot market also plunged by 42 percent to P4.04 per kWh from P6.91 per kWh.

“While energy prices eased, we ramped up coal production and boosted power generation. By keeping our costs under control and operating more efficiently, we were able to cushion the impact of weaker prices,” said SMPC president, chief operating officer and chief sustainability officer Maria Cristina Gotianun.

“Looking ahead, we expect prices to remain relatively stable. Our focus is on ramping up coal production toward our 18 million metric ton target and optimizing our generation mix to maximize contracted capacity,” she added.