SMC Global Power profit down 5% in 9 months

MANILA, Philippines — SMC Global Power Holdings Corp. posted a five percent decline in its net, income in the three quarters ending September, from P14.48 billion last year to P13.69 billion this year, due to higher costs arising from the  extended outage of its power plants, coupled with rising coal prices.

In its quarterly report, SMC Global said consolidated revenues increased seven percent from P87.87 billion to P93.87 billion.

This was driven by “higher spot sales volume, coupled with high average spot prices, and higher nominations from distribution utilities (DU) as demand gradually improved with the reopening of economic activities and easing of community quarantine restrictions.”

However, revenues were eroded by the 20 percent rise in the cost of power sold from P54.5 billion to P65.39 billion.

The company attributed the increase to rising coal prices, the full three quarters operations of Masinloc Unit 3 which commenced on Sept. 26, 2020, and extended outages of the Sual power plant.

It also pointed to higher power purchases since the group needed to address the lack of peak capacity under its bilateral requirements amid the continued deration of the 1,200-megawatt (MW) Ilijan power plant, which was affected by the Malampaya gas supply restrictions.

“Moreover, spot prices surged in May 2021 when the group and the rest of the power industry experienced a very high system demand,” SMC Global said.

Selling and administrative expenses were lower by 18 percent to P3.57 billion.

SMC Global said its consolidated income from operations slipped 14 percent from P28.99 billion to P24.91 billion.

The company also saw interest income drop 53 percent from P882 million to P416 million due mainly to lower average interest rate and shorter placement periods as funds were utilized to defray capital expenditures for ongoing construction projects.

It also registered a P20 million loss, albeit significantly lower from last year’s P589 million loss, due to the share in lower net losses of the Angat Hydropower Corp. (AHC).

SMC Global also halved its other income to P2.57 billion due to the recognition of P3.83 billion in settlement received from third party contractors last year.

The settlement was on account of damages arising from the non-fulfillment of obligations under procurement-related contracts, which was higher compared to the recognized income from reduction of Power Sector Assets and Liabilities Management Corp. (PSALM) fixed fee charges, for the outages of Sual Power Plant’s Units 1 and 2 in the first nine months.

SMC Global also registered P1.16 billion in foreign exchange losses, a turnaround from last year’s P1.22 billion gain due to the depreciation of the peso.