Semirara Mining sees income doubling on Calaca contribution

MANILA, Philippines - Net earnings of Consunji-led Semirara Mining Corp. are expected to double this year from nearly P2 billion in 2009, according to a top company official.

On the sidelines of the company’s annual stockholders meeting yesterday, Semirara vice-chairman Isidro A. Consunji said the projected income growth will mainly be driven by higher sales and significant contributions from the combined 600-megawatt Calaca coal-fired thermal plants in Batangas.

Consunji said the two power plants in Calaca have become a major customer of Semirara, taking up more than 90 percent of the coal firm’s market share.

He said the Calaca power plants not only secure Semirara’s coal supply contract but promises huge earning potentials as well. “The investment is opportunistic because as a stand-alone investment, it is expected to provide a fair return on investment and add value to the returns generated by the company from its coal mining operations,” Consunji said.  

In July 2009, Semirara was declared the highest bidder for the Calaca power plants with its bid of $362 milion.

Consunji said the acquisition of the Calaca power plant is in line with Semirara’s strategy to achieve forward integration from coal mining to power generation, assure continuing off-take of the company’s coal by the power plant and increase coal production. 

Revenues of Semirara are likewise forecast to grow to P20 billion this year, 68 percent higher than the P11.94 billion registered in 2009.

Consunji said the firm is targeting to produce 5.5 million to six million metric tons this year compared with 4.84 million MT a year earlier.

Semirara is aiming to raise between P4 billion and P5 billion from its planned stock rights offering. Around 92.52 million common shares will be issued, coming from the firm’s existing authorized capital.

The offer price,which could be pegged at P70 each share, will be determined based on the volume weighted average price of Semirara’s common shares for the 15-day trading period preceding the pricing date.

The Calaca facility consists of two 300-MW generating units primarily designed to run as a base-load plant and designed to use local coal from Semirara, a subsidiary of DMCI Holdings. The two units are currently producing a combined capacity of only 350 MW.

DMCI was one of only two bidders that showed up for the auction of the plant. Its bid edged out Thailand-based Banpu Power Ltd. Inc. which submitted a bid of $280 million.