Semirara Mining and Power Corp. (SMPC) eked out a 2 percent increase in first-half net income as a surge in electricity earnings offset a sharp slowdown in its coal business.

The integrated coal miner and power producer on Wednesday reported a net income of P8.58 billion for January to June, up from P8.42 billion a year earlier. 

“The second-quarter recovery offset weaker first-quarter results, as improved power earnings balanced lower contributions from the coal segment,” the company noted.

Excluding a P180 million nonrecurring gain, core net income was broadly steady at P8.40 billion, slightly below P8.42 billion a year earlier, while earnings per share inched up to P2.02 from P1.98.

Revenue rose 9 percent to P34.02 billion from P31.33 billion as stronger coal and electricity prices offset weaker shipment and sales volumes. But the topline gains were partly eroded after cash costs climbed a faster 13 percent to P20.44 billion, putting pressure on margins.

The group's power business once again did the heavy lifting. Contributing roughly 70 percent of first-half reported earnings, the segment boosted its net income contribution by 35 percent to P5.86 billion from P4.34 billion, fueled by higher plant availability and firmer wholesale electricity prices.

Coal, however, remained the weak link. Its earnings contribution fell 38 percent to P2.62 billion from P4.26 billion after lower production and shipments, rising mining costs, and water seepage at the Acacia mine curtailed access to higher-quality coal reserves and squeezed profitability.

Even with stronger operating earnings, profitability remained under pressure. Core EBITDA grew 3 percent to P13.58 billion from P13.17 billion, but the EBITDA margin narrowed to 40 percent from 42 percent as costs outpaced revenue growth. 

Net income margin likewise eased to 25 percent from 27 percent, reflecting lower other income, weaker net finance income, and higher taxes.

Despite the earnings headwinds, SMPC ended the first half with a much stronger balance sheet.

Total assets expanded 21 percent to P80.37 billion from P66.49 billion at end-2025, while cash and cash equivalents more than quadrupled to P18.34 billion from P4.36 billion, backed by operating cash flows and a P5 billion loan drawdown in the coal business.

Even with the additional borrowings, the debt-to-equity ratio remained a conservative 0.25, while the current ratio improved to 4.66 from 3.04.

Looking ahead, SMPC expects capital spending to drop to P1.9 billion this year from P5.9 billion in 2025 as it postpones selected coal investments while awaiting the government's bidding process for the Coal Operating Contract.

“Management continues to exercise prudent capital management to preserve financial flexibility,” it added.