Stock Commentary

Semirara Mining & Power Q3 profit soars 153% to P10-B

Merkado Barkada
Semirara Mining & Power Q3 profit soars 153% to P10-B

Semirara Mining & Power [SCC 33.80 3.29%] [link] posted a Q3 profit of P10.1 billion, up 153% from its Q3/21 profit of P4 billion, and down 6% from its Q2/22 profit of P10.8 billion.

SCC's 9M profit surged 249% y/y to P36 billion, which is already more than double SCC’s net profit for the entirety of FY21.

Predictably, SCC credits this outlandish return on a combination of exceedingly high coal prices, SCC-record levels of coal production, and high spot electricity prices.

SCC noted that Q3 is normally its “slowest” due to bad weather and “sluggish” demand.

This was demonstrated by the data, which showed that while SCC easily cleared its Q3 mark from the previous year (thanks again to those elevated prices and production rates), it failed to beat its net profit posted the previous quarter this year, finishing Q3 about 6% lower. 


While the price of coal per ton is down 20-25% as compared to most of Q2, all of the major factors that combined to create the meteoric coal price rise are not only still in play, but in many ways they’re actually primed to get a whole lot worse.

Or better, I guess, if you’re looking at it from SCC’s perspective.

But from literally almost anyone else’s perspective, it’s going to get a lot worse.

The fuel supply rhetoric between Russia and the rest of Europe was ratcheted up considerably when the Nord Stream 1 and Nord Stream 2 natural gas pipelines, owned by Russia’s Gazprom, were shut down in late September after underwater explosions were noticed by Norway and Denmark, and huge leaks were detected.

Huge portions of Europe are entering the winter months now without a consistent supply of natural gas for heating, and many countries are spinning up coal-fired power plants to try and fill as much of the energy demand gap as possible.

But it’s not like “more coal” just appears out of nowhere.

When more people want a thing, the price of the thing goes up.

This is setting up to be a huge year for SCC. 



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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.

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