Semirara Q1 profit falls on weaker power output

MANILA — Semirara Mining and Power Corp. said its first-quarter net income fell 12 percent to PHP 3.8 billion from PHP 4.4 billion a year earlier, as weaker power generation and lower coal shipments weighed on earnings.

The Consunji-led integrated energy company said revenue for January to March declined 7 percent to PHP 15.43 billion from PHP 16.51 billion, as electricity sales and export coal volumes softened.

Coal revenue dropped 5 percent to PHP 11.18 billion from PHP 11.78 billion, with slightly lower shipment volumes offsetting stable average selling prices.

SMPC produced 5.9 million metric tons of coal during the quarter, up 4 percent from 5.7 million MT, after gaining improved access to coal seams at the Narra mine, which is nearing depletion this year.

Total coal shipments declined 4 percent to 4.5 million MT from 4.7 million MT, mainly because of lower export volumes, while domestic demand remained stable.

“Average selling price for Semirara coal remained broadly steady at P2,479 per MT from P2,481, as a higher share of lower-grade shipments offset the impact of stronger global coal benchmarks,” the company said.

The average Newcastle Index, a key benchmark for physical coal contracts in Asia, rose 13 percent to USD 118.8 per MT from USD 105.4 per MT during the period.

Power revenue fell 19 percent to PHP 5.08 billion, as unplanned outages reduced generation and electricity sales volumes, partly offset by higher contracted sales.

SMPC’s electricity sales dropped 22 percent to 1,120 gigawatt-hours from about 1,426 GWh to 1,427 GWh a year earlier, reflecting weaker plant performance.

Despite lower volumes, the average electricity selling price increased 3 percent to PHP 4.54 per kilowatt-hour from PHP 4.42 per kWh, driven mainly by a higher share of contracted sales.

Average spot power prices in the Luzon–Visayas grid declined 5 percent to PHP 3.45 per kWh from PHP 3.63 per kWh, reflecting softer demand in the Wholesale Electricity Spot Market.

As of March 31, SMPC said 49 percent of its 860 megawatts of dependable capacity was contracted, leaving 363.3 MW available for spot market sales after accounting for station service requirements.

The company supplies baseload electricity to the national grid through bilateral contracts and the spot market.

SMPC, a unit of DMCI Holdings Inc., is the country’s largest coal producer, accounting for 97 percent of domestic output, according to BusinessWorld, while the supplied company material said it accounts for more than 90 percent of domestic coal production.

The company also exports coal to China, South Korea, Brunei, and nearby markets.

SMPC currently holds the exclusive right to explore, develop, and conduct coal-mining operations on Semirara Island in Antique, the site of the country’s largest coal mining operation.

That position faces uncertainty after the government rejected SMPC’s request to extend its coal operating contract, placing the asset up for competitive bidding.

The Department of Energy postponed the April 28 deadline for the submission and opening of bid documents “until further notice,” citing the need to address concerns raised by prospective bidders.

“This will likewise afford all participants sufficient time to prepare their respective bid documents,” Energy Undersecretary Alessandro Sales said, according to The Philippine Star.

The DOE auction includes 10 coal blocks on Semirara Island, three blocks in Amulung and Iguig in Cagayan, and five blocks in Benito Soliven, Naguilian, and Cauayan in Isabela.

Power firms including Meralco PowerGen Corp. and San Miguel Global Power Holdings Corp. have signaled interest in the bidding, adding competitive pressure around SMPC’s main coal asset.