Semirara Q1 profit: P6.5-B (down 28%)

Semirara Mining and Power [SCC 32.10, down 2.0%; 74% avgVol] [link] posted a Q1 net income of P6.5 billion, down 27.6% y/y from its Q1/23 net income of P9.0 billion, and up 23% q/q from its Q4/23 net income of P5.3 billion. SCC attributed the lower y/y performance to a combination of higher coal-related expenses and lower market prices for electricity and coal. Revenues were down 11% due to the lower selling prices, despite “increased coal and electricity sales volumes”. Coal shipments were up 37% y/y to 4.8 million metric tons, but the average selling price dropped 33% from P4,427/ton to P2,978/ton. The power segment revenues fell 25% y/y due to a 28% drop in the average selling price of electricity.

MB bottom-line: Some of that decline in the average selling price for coal was attributable to SCC, since the company noted that it sold a higher proportion of “non-commercial grade coal” in its shipments. On the bright side, SCC reported higher power plant availability as it improved from 87% to 92%, and higher average capacity which improved from 688 MW to 702 MW. Better plant availability means that SCC doesn’t have to buy as much expensive power on the open market to satisfy its growing portfolio of power sales contracts. This is why downtime is a double killer. Downtime is a fact of life, but there is likely room for improvement whenever the downtime exceeds the coal power plant annual average of 10%. Prices go up and down, but SCC is getting better at managing the variables that are within their control.  

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