Semirara earnings tumble as coal, energy prices soften

Semirara Mining and Power Corp. (SMPC), led by billionaire Isidro Consunji, booked lower earnings in the January to September period amid the drop in energy and coal prices, alongside costlier production.

In a disclosure on Monday, Semirara’s net income got slashed by 37 percent to P9.89 billion from P15.7 billion recorded a year earlier.

“This has been a more difficult year operationally, but we continue to adapt,” SMPC president, chief operating officer and chief sustainability officer Maria Cristina Gotianun said in a separate statement.

“Our priority is to strengthen reliability, manage costs and preserve our financial flexibility to navigate changing market and operating conditions,” the executive added.

Its power business accounted for 57 percent of SMPC’s profit in the period, with coal operations providing the remaining 43 percent.

The group put the blame on “the continued normalization of coal and spot electricity prices, higher noncash costs and the equity net loss from its cement associate.”

Higher production and better plant performance also failed to lift its revenues, weighed down by lower prices. The group said its top line dropped by 13 percent to P43.26 billion.

Coal operations

SMPC’s total coal shipments improved by 5 percent to a record-high of 12.9 million metric tons (MMT) from 12.3 MMT. Coal production also climbed 15 percent to 15.1 MMT from 13.1 MMT.

However, the average selling price weakened by 19 percent to P2,325 per metric ton (MT) against the previous P2,864 per MT.

During the period, the average Newcastle Index—the benchmark price for thermal coal in the Asia-Pacific region, saw a 22-percent drop to $104.5 per MT.

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Power biz

The group also witnessed stronger power sales in the first nine months, rising by 12 percent to record 4,186 gigawatt hours, driven by boosted plant activities.

Fifty-seven percent of the power sales went to the spot market, while the remaining was under bilateral contract quantities.

Despite the increase in sales, SMPC said its overall average selling price fell 10 percent to P4.46 per kilowatt hour (kWh) from P4.93 per kWh.

Average spot electricity prices in the Luzon and Visayas grids likewise decreased to P3.73 per kWh, down 33 percent from P5.59 per kWh.