Consunji-led Semirara Mining and Power Corp. (SMPC) registered a net income of P4 billion in the second quarter, up 279 percent year-over-year, due to record-high coal sales and prices and higher Wholesale Electricity Spot Market (WESM) prices.
This brings its first-half net income to P6.3 billion, a 181-percent jump from the same period a year ago.
Core profit in the second quarter stood at P4.1 billion, up 273 percent. The numbers at end-June, stood at P6.4 billion, a growth of nearly three times from last year’s P2.2 billion.
SMCPC, the largest domestic coal producer, said 75 percent of the first-half net income came mostly from the coal segment, while Southwest Luzon Power Generation Corp. (SLPGC) and SEM-Calaca Power Corp. (SCPC) contributed 16 percent and 9 percent, respectively.
SCPC and SLPGC generate baseload power for the Luzon-Visayas grid. Both supply electricity through bilateral contract quantity and the WESM. “The coal and electricity markets staged a strong rebound from the negative impacts of strict coronavirus lockdowns last year. Higher coal production and reduced internal usage also allowed SMPC to boost its export sales, benefitting from robust China demand and the weak peso.”
Coal shipments nearly doubled to 4.9 million metric tons (MMT), an all-time high in terms of quarterly sales. This was due to a 167-percent surge in exports and a 31-percent recovery in domestic sales.
In terms of coal prices, strong China demand amid tight supply boosted Newscatle coal prices, which peaked at $136 in June, the highest level in more than a decade. SMPC said this led to a 49-percent recovery in average selling price from P1,601/MT to P2,393/MT. SMPC sees sustained high global coal prices at around $149 per MT until the end of the year largely due to increased Chinese demand during their summer and winter seasons.
Coal supply, meanwhile, is seen to remain tight as major coal-producing countries deal with Covid-19 lockdowns, bad weather and political unrest. The company anticipates full year average to grow 105 percent to $123.8/MT from last year’s actual average of $60.4/MT.
SMPC’s power subsidiaries–SCPC and SLGPC–performed better during the period despite the prolonged forced outage of SCPC Unit2. The 300MWplant has been offline since December 2020.
SCPC contributed P685 million to the parent company in the second quarter while the net income contribution of SLGPC stood at P358 million.
The average electricity spot prices in the second quarter grew 178 percent to P5.84/kWh, from last year’s P2.10 per kilowatt hour (kWh) owing to higher demand and lower supply from multiple and extended plant outages.
SMPC sees electricity spot prices in the second half to consolidate to an average of P3.96/kWh as demand eases during the rainy season.
However, it said supply is likely to improve with the expected commissioning of a 670MW power plant, increased output of hydropower plants and reduced plant outages. It expects full year average to grow 84 percent to P4.17/KWh from the actual average of P2.27/KWh in 2020.
SMPC’s capital expenditures at end-June reached P3 billion, bulk of which went to the purchase of various mining equipment for the coal segment. The rest was spent on power plant maintenance.
