Coal price drop cuts SMPC earnings
By Lenie Lectura – August 10, 2020
from Business Mirror
Consunji-led Semirara Mining and Power Corp. (SMPC) posted a 61-percent drop in earnings in the first half due to the decline in coal and power prices.
From P5.7 billion, SMPC’s net income fell to P2.2 billion at end-June, of which P1 billion was recorded in the second quarter.
Earnings contribution from the coal business fell 59 percent to P1.8 billion due to weak coal sales and average selling price.
From January to June, coal sales contracted 27 percent from 7.9 million metric tons (MMT) to 5.7 MMT, while average selling price per MT fell 21 percent from P2,229 to P1,765.
The government-imposed lockdown dragged down coal demand and average selling price, the company said.
“We saw historic dips in prices, particularly in April when Global NewCastle coal prices reached $49.30 per metric ton, the sharpest drop in six years,” said SMPC President and COO Cristina C. Gotianun.
The same reason was cited for the net loss of P236 million incurred by its energy subsidiary, Southwest Luzon Power Generation Corp. (SLPGC) in the first half, from P1.6 billion in earnings it recorded in the same period a year ago.
It said electricity sales and average selling price from March to June were also affected by the pandemic. SLPGC recorded a 43-percent drop in energy sales from 856 gigawatt hour to 489 GWh and a 38-percent cut in average selling price from P4.73 per kilowatt hour (kWh) to P2.92 per kWh.
“The decrease in spot market prices in April was also staggering. From P6.71 per kWh last year, it plunged to P1.40 per kWh,” added Gotianun.
Another SMPC unit Sem-Calaca Power Corp. (SCPC) contributed to its parent firm P726 million, a turnaround from P242 million in losses during the same period. The improvement was mainly attributable to higher energy sales, which grew 22 percent from 899 GWhr to 1,095 GWhr.
The completion of the power facility’s life extension program for units 1 and 2 resulted in the reduction of outages by 53 percent year-on-year from 5,879 hours to 2,750 hours.
The said program is a cost-effective strategy to maintain and upgrade operations of existing facilities beyond its traditional lifetime and to limit environmental complications and financial risks.
