Soft coal, power prices hit Semirara profits

Integrated energy company Semirara Mining and Power Corp. (SMPC) saw its net income drop by 37 percent to P9.9 billion in the first nine months of the year from P15.7 billion a year ago, weighed down by lower coal and electricity prices and higher production-related costs.

“This has been a more difficult year operationally, but we continue to adapt,” SMPC President, Chief Operating Officer, and Chief Sustainability Officer Maria Cristina C. Gotianun said.

“Our priority is to strengthen reliability, manage costs, and preserve our financial flexibility to navigate changing market and operating conditions,” she added. 

From January to September, the average Newcastle Index (NEWC) slipped 22 percent to $104.5, while the Indonesian Coal Index 4 (ICI4) fell 16 percent to $45.9. Average spot electricity prices in the Luzon-Visayas grid also declined 33 percent, from P5.59/kWh to P3.73/kWh.

For the third quarter alone, consolidated net income plunged 53 percent to P1.5 billion from P3.1 billion a year earlier as weak energy prices continued to weigh on profitability.

Total coal shipments rose 5 percent to a record 12.9 million metric tons (MMT), driven by higher exports and increased deliveries to its own power plants.

However, the average selling price of Semirara coal fell 19 percent to P2,325 per ton from P2,864 per ton, reflecting market trends and a greater share of lower-grade shipments.

Coal production climbed 15 percent to a record 15.1 MMT, supported by improved access to coal seams at the Narra mine.

Total power sales grew 12 percent to a record 4,186 gigawatt-hour (GWh) from 3,722 GWh, following improved plant performance. Of total energy sold, 57 percent went to the spot market, while 43 percent was covered by bilateral contracts.

The average selling price for electricity declined 10 percent to P4.46 per kilowatt-hour (/kWh), in line with wider supply margins amid stable demand in the Wholesale Electricity Spot Market.

As of September, 40 percent of SMPC’s 860 megawatts (MW) dependable capacity was under contract. After accounting for station service, 429.60MW was available for spot market sales.