Semirara reports 9% drop in 9-mo income

MANILA, Philippines - Semirara Mining Corp. reported a nine percent drop in its nine-month profit to P4.71 billion owing to lower average prices of coal and energy.

In a disclosure to the Philippine Stock Exchange, Semirara said this was an improvement from the decline of 21 percent recorded in the first half.

The coal and power segments contributed P3.21 billion and P1.5 billion, respectively, to Semirara’s bottom-line.

Semirara said the decrease in volume of coal sold and low coal prices starting at the end of second quarter which persisted until the end of the this quarter resulted to the 22 percent drop in coal revenue year on year.

Volume sold to the local market only dropped by five percent, while export was down by 21 percent. Lower off-take of own power subsidiary due to extended commissioning of unit 1 and lower off-take in the third quarter by other power plants was offset by the 74 percent jump in off-take of the cement plants.

The power segment, on the other hand, is already catching up as it showed a six percent rise in power generation as unit 1 was commissioned last week of July 2012. The synchronization of unit 1 to the grid started in August.

However, energy sold is three percent lower but significantly improved from the 19 percent negative year-on-year variance. The improvement was due to two plants which were already online to the grid and improvement in availability and utilization of unit 2, thus the higher power generated.

Average selling price per kilowatt hour as of end of September declined by 15 percent, but this was cushioned by the decrease in cost of generation since both the price of coal fuel and power rate are indexed to international coal price and use of washable coal during the summer months.

Semirara currently holds coal operating contract no.5, which encompasses 13 coal blocks covering 5,500 hectares on Semirara Island, nine coal blocks covering 3,000 hectares on Caluya Island and 12 coal blocks covering 4,200 hectares on Sibay Island.