Semirara Mining nets P14.14 B in 2017

MANILA, Philippines — Semirara Mining and Power Corp.’s net earnings rose by nearly a fifth in 2017 on robust coal sales volume and prices, as well as higher generation from its coal plants.

In a disclosure to the Philippine Stock Exchange, Semirara said its consolidated net income after tax increased 18 percent from P12.04 billion to P14.14 billion.

This translated to a consolidated earnings per share of P3.32, up 17 percent from P2.83 the previous year.

It said its coal business contributed P6.08 billion, Sem-Calaca Power Corp. (SCPC) with P4.55 billion and Southwest Luzon Power Generation Corp. (SLPGC) with P3.74 billion.

Under its coal business, Semirara said the improved coal profitability was driven by the increase in average selling price and slight increase in volume sold.

“Production and coal sales set new record highs at 13.2 million tons and 13.1 million tons, respectively,” it said.

Meanwhile, the average selling price of coal rose 20 percent from P1,886 per ton to P2,268 per ton.

For its power business, SCPC—which operates the over 30-year old 2x300-megawatt (MW) coal plant in Calaca, Batangas—posted two significant non-recurring transactions last year “that had impact on profitability.”

Semirara said the power unit had a partial recognition of income from disputed receivables from Power Sector Assets and Liabilities Management Corp. (PSALM) amounting to P330 million.

It also recorded accelerated depreciation—amounting to P840 million—relative to the life extension project of Units 1 and 2 which will start in the later part of 2018.

SCPC has embarked on a three-year upgrade program ending 2019 for its old units. It has Japanese energy and electronics giant Toshiba Corp. to optimize the operations and extend the life span of the Calaca power units.

Apart from the non-recurring items, SCPC also improved its capacity push generation to 3,515 gigawatt-hours (gwh), up 21 percent from 2,905 gwh the previous year.

“Unit 1 recorded an average capacity of 257 MW as compared to only 180 MW in 2016,” Semirara said.

This drove total energy sold higher by seven percent from 3,322 gwh to 3,560 gwh. Average selling price also improved 14 percent with higher Newcastle price benchmark at P3.75 per kilowatt-hour (kwh) from P3.31 per kwh.

Meanwhile, cost of energy sold slightly increased two percent from P2.24 per kwh to P2.27 per kwh.

Semirara’s other power unit, SLPGC, on the other hand, reported lower stand alone net income due to unrealized revenue of P219 million from fair market value gain relative to the company’s financial contract with a customer and net settlement income of P133 million after the final turnover of the power plants.

“The drop in net income after tax is mostly a result of higher real property taxes due on the new power assets, as well as full depreciation cost of the power plants in the current year,” Semirara said.

But in terms of gross generation, it posted a 22 percent growth at 1,687 gwh from 1,383 gwh. Total volume sold also increased by eight percent from 1,478 gwh to 1,599 gwh. Meanwhile, average selling price is slightly higher at P4.43 per kwh from P4.42 per kwh.