SEMIRARA Mining and Power Corp. (SMPC) reported a 23.3% fall in consolidated net income to P8.9 billion as of September this year from P11.6 billion a year ago as coal and energy sales both declined during the period.
In a disclosure to the stock exchange on Thursday, the Consunji-led integrated energy company said the nine-month core profit of its coal business increased by 8.8% to P7.4 billion from P6.8 billion although those of its two power generation subsidiaries declined by double digits.
Figures for the third quarter alone were not immediately disclosed by SMPC, a vertically integrated power producer that mines its own fuel source, allowing it to generate affordable baseload power.
Coal production as of September slipped by 10% to 8.9 million metric tons (MT) from 9.9 million MT a year ago.
“Continuous heavy rains in July and August caused slowdown in production in the third quarter to 1.7 million MT from 4.1 million in the first quarter and 3.1 million MT in the second quarter of 2018,” the company said.
“To maximize activities, despite the rains that hampered coal extraction, operations focused on waste stripping in the third quarter,” it added.
The move resulted in an increase in its strip ratio, or the amount of overburden materials over the amount of coal extracted, to 12.4 bank cubic meters (BCM); 1 MT, which compares with last year’s 9.5 BCM:1 mt.
“Advance material stripped during the quarter will benefit future periods as mining activities move closer to coal seams,” the company said.
The lower production resulted in a 15% decrease in coal sales to 8.3 million MT from 9.8 million MT. The decline came amid a 3% rise in domestic demand. Coal export sales fell by 34% because of lower production.
Higher average selling price per ton offset the drop in sales volume, resulting in a rise in coal revenues by 8.6% to P22.8 billion from P21 billion last year.
In the power business, SEM-Calaca Power Corp.’s (SCPC) gross generation dropped by 8.6% to 2,287 gigawatt-hours (GWh) from 2,503 GWh. The power plant’s second unit was on maintenance shutdown for the first three months of the year. Maintenance activities spilled over up to the first week of April, the company said.
The first unit had a continuous run up to the end of the third quarter except for a brief shutdown in March and a four-day shutdown in June.
SCPC’s sales volume slipped 5.9% to 2,359 GWh from 2,508 GWh from the previous year. Still, the company’s revenues increased by 4.3% to P9.8 billion from P9.4 billion because of an 11% improvement in energy prices.
Southwest Luzon Power Generation Corp. (SLPGC) recorded a bigger drop in gross generation at 44% to 773 GWh from 1,380 GWh.
SLPGC’s first unit was shut down on March 6 because of an accident that resulted in a crack in the rotor. The plant resumed normal operations in the last week of September.
SLPGC power plants have machinery breakdown and business interruption insurance cover. Its second unit had a stable run starting on April 16 except for a disruption in June due to transmission line fault and two emergency outages totaling to 19.5 hours in September. It has been generating at a rated capacity of 150 megawatts.
The power company’s composite average price per kilowatt-hour increased by 5.2% to P4.44 from P4.22, partially offsetting the 41% decline in sales volume as a result of the continued shutdown of SLPGC’s first unit until the end of the quarter.
SCPC’s core income dropped 64% to P804 million from P2.22 billion in the same period last year. SLPGC’s core profit registered a 76.9% decrease to P582 million from P2.52 billion.
Net of eliminations, coal, SCPC and SLPGC contributed P4.71 billion, P3.07 billion and P1.16 billion, respectively, for the nine months to September.
On Thursday, shares in SMPC fell 10.03% to close at P26 each. — Victor V. Saulon
