Low coal, power prices cut Semirara Q2 profit

The second-quarter earnings of integrated energy company Semirara Mining and Power Corp. (SMPC) experienced a decline of 41 percent, dipping from P10.2 billion in the previous year to just over P6 billion.

From the previous quarter, SMPC’s net income decreased by 8 percent from P6.5 billion, attributed to lower coal and electricity sales volume along with reduced average selling prices.

In a stock exchange report on Friday, the company said the downturn was primarily attributed to the ongoing decrease in coal and electricity prices from their record highs.

The Newcastle Index (NEWC) and the Indonesian Coal Index 4 (ICI4) decreased by 16 percent in the second quarter. The average NEWC declined from $160.7 to $135.6, while ICI4 witnessed a notable decline, falling from $65.1 to $55.

Due to lower spot market prices and fuel costs for baseload plants, the overall average selling price (ASP) of electricity experienced a 10 percent decrease, declining from P6.22 per kilowatt-hour (/kWh) to P5.58/kWh.

More of the same in H2

“Despite our efforts to manage costs and improve operational efficiencies, the persistent decline in global coal and electricity prices has significantly impacted our financial performance,” SMPC president and COO Maria Cristina Gotianun said. 

“The second half of the year should be more of the same for us regarding coal prices. We also expect coal production, electricity demand, and spot prices to taper because of the rainy season,” she added.

From April to June, total shipments rose by 2 percent from 4.5 million metric tons (MMT) to 4.6 MMT on stronger domestic demand.

Domestic shipments accelerated by 16 percent, from 1.9 MMT to 2.2 MMT, primarily driven by higher sales to subsidiaries SEM-Calaca Power Corp. (SCPC) and Southwest Luzon Power Generation Corp. (SLPGC).