SEMIRARA MINING and Power Corp. (SMPC) saw its second-quarter (Q2) attributable net income decline by 33% to P4.1 billion as coal and electricity prices continued to normalize.
For the three months ended June, SMPC’s revenues dipped by 18.4% to P18.17 billion due to lower selling prices in the coal segment and weaker spot market prices in the power segment, according to its financial statement released on Monday.
Broken down, coal and power revenues decreased by 20% to P10.27 billion and 6% to P6.47 billion, respectively.
The average selling price for Semirara coal went down by 20% to P2,223 per metric ton (MT) due to “the combined effect of stabilizing global market indices and a higher proportion of lower-quality and non-commercial grade coal shipments.”
During the period, the average Newcastle Index fell by 26% to $100.50, while the Indonesian Coal Index 4 went down by 16% to $46.40.
SMPC’s coal production increased by 8% to 5.6 million MT, driven by improved access to coal seams at the Narra mine.
The company, however, reported flattish shipments at 4.6 million MT, as increased own-plant sales offset lower foreign shipments.
In the power segment, average spot electricity prices on the Luzon-Visayas grid declined by 42% to P4.04 per kilowatt-hour due to large supply margins brought about by additional power capacity, fewer outages, and a modest increase in demand.
The company reported a 17% increase in power sales to 1,435 gigawatt-hours, fueled by stronger plant availability and higher average capacity.
Of the total energy sold, 56% was sold to the spot market, while the remaining 44% was covered by bilateral contracts.
As of end-June, the company had committed 38% of its 840-megawatt (MW) total dependable capacity. After accounting for internal power usage, about 435.6 MW was left that could be sold to the spot market.
“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,” SMPC President, Chief Operating Officer and Chief Sustainability Officer Maria Cristina C. Gotianun said in a media release.
For the first six months ended June, SMPC’s earnings decreased by 33.1% to P8.42 billion due to the continued stabilization of coal and spot electricity prices, and the recognition of an equity net loss from its cement associate.
Revenues sank by 14.4% to P31.33 billion, driven by softer coal index benchmarks and weaker electricity spot prices, cushioned by improved power segment generation.
“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,” Ms. Gotianun said.
SMPC is the only vertically integrated power generator in the country that runs on its own fuel. The company supplies fuel to power plants, cement factories, and other industrial facilities across the Philippines. It also exports coal to China, South Korea, Brunei, and other nearby markets.
At the local bourse on Monday, shares in the company declined by 1.52% to close at P32.45 apiece. — Sheldeen Joy Talavera
