Semirara profit in Q1 drops as coal prices, exports fall

BY LENIE LECTURA – MAY 4, 2023
from Business Mirror

Consunji-led Semirara Mining and Power Corp. (SMPC) suffered a 40-percent year-on-year decline in net income in the first quarter.

From the record P15 billion it posted in the first quarter of 2022, the company’s net income fell to P9 billion at end-March. The company attributed the decline to “high-base effect.”

Revenues contracted by 29 percent to P20.7 billion from P29.1 billion mainly on account of weaker coal contribution. However, this was offset by the all-time high revenue from its power business.

Coal revenues declined by 40 percent to P15.5 billion from P25.7 billion due to lower shipments and selling prices as the company turned cautious amid market volatility.

“We limited our first-quarter exports because of the wild price swings. Now that prices have settled, we intend to boost our foreign shipments in the coming months,” SMPC President Maria Cristina Gotianun said in a statement.

The company has set a sales target of 15 to 16 million metric tons (MMT) for this year.

Total coal shipments from January to March receded by 31 percent to 3.5 MMT, from 5.1 MMT following a 52-percent drop in exports to 1.5 MMT from 3.1 MMT and flat domestic sales.

Semirara coal average selling prices (ASP) fell by 14 percent to P4,427 per metric ton (MT) from P5,125 per MT primarily due to sluggish exports and higher shipments of lower grade coal.

Meanwhile, revenues from the power businesses rose by 59 percent to a historic high of P7.7 billion from P4.8 billion on the back of double-digit improvements across all key operating metrics.

With the commercial operation of SEM-Calaca Power Corp.’s (SCPC) Unit 2 on October 9, 2022, overall plant availability surged to 86 percent from 58 percent, while total average capacity jumped by 32 percent to 688 MW from 520 MW.

Total gross generation rebounded by 44 percent to 1,316 gigawatt hours (GWh) from 914 GWh, as three of the four SMPC-owned power plants recorded better availability and average capacity.

Consequently, total power sales accelerated by 37 percent to 1,241 GWh from 908 GWh, 71 percent of which was sold to the Wholesale Electricity Spot Market (WESM). Sales to WESM expanded by 69 percent to 880 GWh from 522 GWh.

Easing fuel prices and sluggish January demand led to a 2-percent dip to P6.69 per kilowatt hour (kWh) from P6.84 per kWh. However, higher spot sales and a 53-percent upturn in bilateral contract quantity prices lifted overall ASP by 17 percent to P6.17/KWh from P5.29/KWh.

Total spot purchases contracted by 33 percent to P331 million from P493 million because of better plant availability and capacity, coupled with slightly lower contracted capacity.

At the end of the first quarter, only 26 percent of SMPC’s 720MW dependable capacity was tied to contracts, which were mostly under Southwest Luzon Power Generation Corp. (SLPGC).

SMPC is the country’s largest domestic coal producer. It supplies affordable fuel to power plants, cement factories and other industrial facilities across the Philippines.

Under its power business, SCPC owns the 2×300-MW Calaca coal-fired power plant in Batangas. It acquired this from the government in 2009 with its bid of $362 million. SLPGC, meanwhile, runs the 2×150-MW coal power facility also in the same area.