Semirara Mining and Power’s net income falls 66% to P3.4 billion in third quarter

SEMIRARA MINING and Power Corp. (SMPC) on Tuesday reported a 66% plunge in attributable net income to P3.4 billion for the third quarter, dragged down by weak coal selling prices, fewer shipments, and lower foreign exchange gains.

“The third quarter is always a slow period for us in terms of production and demand because of the rainy season,” Maria Cristina C. Gotianun, president and chief operating officer of SMPC, said in a media release. “Last year was an outlier because of high index prices,” she added.

“Our power business really stepped up this year. Their all-time high results offset the sharp earnings drop in our coal business,” she also said.

The Consuji-led company reported that higher power sales, financial income, and lower royalty expenses and income taxes partly offset the decline in net income.

In the July-to-September period, the company saw a 45% revenue decrease, falling to P11.63 billion from P21.16 billion the previous year, due to slower coal sales and weaker selling prices in both coal and power segments.

Coal revenues dropped by 58% to P6.27 billion from the previous P15.04 billion, while the cost of sales decreased by 12% to P4.17 billion.

The average selling price of Semirara coal went down by 36% to P3,315 per metric ton (MT) due to “stabilizing market indices and lower shipments of commercial grade coal.”

Total shipments in the third quarter decreased by 22% to 2.5 million MT amid sluggish exports and limited beginning commercial grade inventory of 1.6 million MT.

Net foreign exchange gain for the third quarter fell by 68% to P246 million on lower export sales and less favorable foreign exchange rates.

Power revenues, on the other hand, sank by 12% to P5.36 billion from P6.12 billion posted in the third quarter of 2022 due to lower spot prices. Overall average selling price went down by 23% to P4.81 per kilowatt hour.

The company’s gross power generation went up by 15% to 1,167 gigawatt hours (GWh) as higher output in its SEM-Calaca Power Corp. offset the weaker performance of Southwest Luzon Power Generation Corp.

Power sales grew by 13% to 1,099 GWh from 970 GWh, the majority of which, or about 68%, was sold to the spot market.

Finance income increased fourfold to P245 million on higher base and prudent treasury management, the company said.

Meanwhile, the company’s operating expenses dropped to P1.78 billion during the period from P4.40 billion previously.

For the first nine months, SMPC recorded an attributable net income of P22.62 billion, down by 37% from P35.95 billion previously, mainly due to “high base effect and stabilizing global coal market.”

Revenues for the January-to-September period fell by 23% to P56.20 billion from P73.17 billion in the same period last year.

Year-to-date operating expenses decreased to P10.34 billion from P16.08 billion a year ago.

At the stock exchange on Wednesday, shares in the company closed 3.49% lower at P29 apiece. — Sheldeen Joy Talavera