Semirara sees profit slowdown anew

Danessa Rivera (The Philippine Star) - May 15, 2019 - 12:00am

MANILA, Philippines — Consunji-led Semirara Mining and Power Corp. (SMPC) expects net earnings to slow down this year amid the scheduled and unplanned outage of its generating plants.

This as power plant shutdowns and softer global coal prices halved its net earnings in the first quarter.      

“I don’t think it will be better than last year. Two of our plants will be on maintenance shutdown this year. Meanwhile, for coal, we see higher production, but lower selling price,” said SMPC chairman and chief executive officer Isidro Consunji.

“But next year will be okay,” Consunji said.

Last year, SMPC registered a net income of P12 billion, down 15 percent from P14.2 billion the previous year.

For the first quarter, SMPC reported a consolidated net income of P2.33 billion, down 49 percent  year on year.

Its coal business contributed P2.13 billion, subsidiary Southwest Luzon Power Generation Corp. (SLPGC) pitched in P226.1 million, while SEM-Calaca Power Corp. (SCPC) recorded a net loss of P22.37 million.

For the coal segment, production dropped two percent to 4.06 million tons because of higher strip ratio which increased 37 percent from 9.12 to 12.53.

In terms of sales, exports picked up as it increased by four percent to 3.55 million tons.

However, the drop in global coal prices translated to an 18 percent year-on-year decline in coal average selling price to P2,272 per ton this year.

For the power segment, the combined energy sales of SCPC and SLPGC increased 11 percent to 638 gigawatt-hours (gwh).

Softer global coal prices, however, affected the average selling price, which dropped 19 percent to P4.32 per kwh.

Total generation likewise fell from 642 gwh  to 508 gwh.

SCPC’s Unit 1 is on a six-month Life Extension Program (LEP) since Dec. 30, 2018. LEP is a cost-effective strategy to maintain and upgrade operations of existing facilities beyond its traditional lifetime, at the same time to limit environmental complications and financial risks.

The power segment incurred a total loss of P95 million for purchases of replacement power totaling 216 gwh.

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