Stock Commentary

Semirara FY23 net income down 30% to P27.9-B

Merkado Barkada
Semirara FY23 net income down 30% to P27.9-B

Semirara Mining and Power [SCC 32.75, up 0.3%] [link] posted an FY23 net income of P27.9 billion (down 30%) and a Q4 net income of P5.3 billion (up 36% y/y). SCC said the underperformance was due to the lower market prices for coal and electricity, but that it anticipated price weakness and focused on maximizing operations to “soften the impact of weaker selling prices.” SCC delivered a record amount of coal and a record amount of electricity through 2023.

MB bottom-line: While down 30%, SCC’s annual profit was the second-highest in the company’s history. That’s how insane the 2022 price pump in coal and electricity was for this company. That said, I don’t get the logic behind focusing on operational excellence to mitigate lower prices, but only after that pump when the prices are lower. Like, of course you want to ship as much coal as you can and sell as much electricity as you can, but wouldn’t you have wanted to do that when the prices were at generational, once-in-a-lifetime highs? This is what I’ve been saying about SCC for years: they were operationally soft during the hottest coal and electricity markets of my lifetime. I’ll take improved uptime and volume any day, but if I were an investor, I’d have wanted that effort to have been given earlier.


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