SMPC net income down 40% in Q1

MANILA, Philippines — Earnings of integrated energy company Semirara Mining and Power Corp. (SMPC) fell in the first quarter following a high-base in the same period last year wherein the company posted its highest-ever quarterly net income.

SMPC said it posted a 40-percent decline in its net income to P9 billion in the first quarter from P15 billion in the same period in 2022.

Despite an all-time high revenues from the power segment, consolidated topline dropped by 29 percent to P20.7 billion from P29.1 billion on weaker coal contribution.

Coal revenues of the company contracted by 40 percent year-on-year to P15.5 billion as a result of lower shipments and selling prices.

“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 and COO Maria Cristina Gotianun said.

SMPC’s total coal shipments from January to March decreased by 31 percent from 5.1 million metric tons (MMT) to 3.5 MMT due to a 52-percent drop in exports and flat domestic sales.

Semirara coal average selling prices was 14 percent lower year-on-year to P4,427 per MT in the first quarter as a result primarily of sluggish exports and higher shipments of lower grade coal.

For this year, Gotianun said SMPC’s sales target is between 15 million and 16 million metric tons.

Meanwhile, the company saw its revenues from the power businesses surge by 59 percent from P4.8 billion last year to a record high of P7.7 billion on the back of double-digit improvements across all key operating metrics.

SMPC said overall plant availability improved to 86 percent, while total average capacity increased to 688 megawatts during the period following the commercial operation of SEM-Calaca Power Corp.’s Unit 2 in Oct. 9 last year.

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

Further, total power sales accelerated by 37 percent to 1,241 GWh, 71 percent of which was sold to the Wholesale Electricity Spot Market.

In another development, the planned merger of DMCI Mining Corp. and SMPC has been called off due to cost and valuation issues.

“We have studied the proposed transfer of DMCI Mining from DMCI Holdings to Semirara. However, our finance people concluded that the future cost involved in such transfer will make it very expensive,” SMPC chairman and chief executive officer Isidro Consunji said during the company’s annual stockholders’ meeting.

“And secondly, the ability to determine a fair price for both sets of stockholders, DMCI and Semirara, is extremely difficult considering the fact that the bulk of the mining assets of the DMCI Mining are not fully permitted. So it will probably not happen anymore,” he said.

Consunji last year announced plans to transfer DMCI Mining to SMPC were being studied to create value for both stockholders.

DMCI Mining, which was incorporated in 2007 primarily to carry on the business of mining all kinds of ores, metals and minerals, has significant operations in Zambales and Palawan.

Meanwhile, SMPC is mulling to venture into liquefied natural gas (LNG) projects as the company looks to bolster its power generation business.

Consunji said the company is open to investing in LNG plants.

“We expect to expand our power projects and maybe even shift to LNG if and when the situation arises that makes this shift a good business opportunity,” he said.