SMPC income down 28% on weaker market prices

SEMIRARA Mining and Power Corp. (SMPC) posted an attributable net income of P6.54 billion for the first quarter, down by 28% from the previous year due to lower selling prices for coal and electricity.

“While we faced some pricing challenges this quarter, our robust export sales and improved plant performance demonstrate the resilience and adaptability of our operations,” SMPC President and Chief Operating Officer Maria Cristina C. Gotianun said in a statement on Monday.

For the January-to-March period, the company’s revenues declined by 11% to P18.43 billion from P20.71 billion in the same period last year.

This was attributed to the “softer market prices for both coal and power segment coupled with higher proportion of noncommercial grade coal shipments.”

SMPC said that the decline in revenues was cushioned by increased coal shipments and electricity dispatch.

The average selling price for Semirara coal declined by 33% to P2,978 per metric ton (MT) from P4,427 per MT in the previous year.

Coal sales went up by 37% to 4.8 million MT, mainly driven by exports which soared by 78% to 2.7 million MT.

Total coal shipments increased by 37% to 4.8 million MT, boosted by strong Chinese and international demand.

Foreign shipments went up by 78% to 2.7 million MT as China sales more than doubled to 2.3 million MT.

Domestic shipments rose by 6% to 2.1 million MT due to an uptick in internal sales, as the company recorded its highest overall plant availability at 92%.

“With better overall plant availability, gross generation increased by 7% from 1,316 gigawatt hours (GWh) to 1,408 GWh,” the company said.

The average selling price for SMPC’s electricity dropped by 28% to P4.47 per kilowatt-hour largely due to the sharp drop in the Wholesale Electricity Spot Prices.

Electricity sales volume grew by 3% to 1,281 GWh due to higher bilateral contract quantity (BCQ) sales, which offset the decline in spot market dispatch for the period.

BCQ sales rose by 38% to 499 GWh while spot sales decreased by 11% to 782 GWh.

During the company’s annual stockholder’s meeting, Ms. Gotianun said that Narra mine has remaining reserves of approximately 45 million MT as of yearend 2023.

“Assuming demand remains stable, primarily from the domestic market, we believe an annual shipment of 16 million MT is sustainable until 2026,” she said.

She also said that exploration activities at the Acacia mine are ongoing, “which could sustain our coal operations for an additional four years.”

The company expects coal demand in China to remain stable in the near to medium term “given its important role in their energy security program,” she noted.

“Coal is not only a primary source of energy but also a critical backup that ensures supply stability. RE (renewable energy) sources typically provide intermittent output so China relies on coal to achieve a consistent energy supply,” she added.

“We do not foresee a rapid decrease in their coal consumption anytime soon.”

Shares of the company on Monday went down by P0.55 or 1.68% to close at P32.20 each. — Sheldeen Joy Talavera