Semirara Mining and Power Corporation Reports 41% Decline in Q2 Earnings to P6.0B; H1 Net Income Falls 34% to P12.6B

Integrated energy company Semirara Mining and Power Corporation (SMPC) posted a 41% drop in second-quarter earnings to slightly over P6.0 billion from P10.2 billion the previous year, as coal and electricity prices continued to subside from historic levels.

“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,” said SMPC president and COO Maria Cristina C. Gotianun.

From April to June, average Newcastle Index (NEWC) and Indonesian Coal Index 4 (ICI4) both declined by 16%. Average NEWC fell from US$160.7 to US$135.6, while ICI4 dropped from US$65.1 to US$55.0.

Overall average selling price (ASP) of electricity decreased by 10%, from P6.22/kWh to P5.58/kWh, due to lower spot market prices and fuel costs for baseload plants.

Quarter-over-quarter (Q1 2024 vs Q2 2024), SMPC net income contracted by 8% from P6.5 billion owing to lower coal and electricity sales volume and average selling prices.

From January to June, the company’s earnings dropped by 34% from P19.2 billion to P12.6 billion due to the combined effect of weaker selling prices, higher total coal production costs and increased coal and electricity sales volume.

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

Coal Operating Results

For the second quarter alone, total shipments rose by 2% from 4.5 million metric tons (MMT) to 4.6 MMT on stronger domestic demand.

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

During the same period, Semirara coal ASP slumped by 33%, from P4,151 per metric ton (MT) to P2,780 per MT. This decrease was due to stabilizing coal indices and an increased demand for non-commercial grade coal, which is sold at a lower price.

Total production surged by 73%, from 3.0 MMT to 5.2 MMT, primarily due to lower rainfall levels and the near depletion of Molave mine last year, which created a low base effect.

Power Operating Results

Overall plant availability slightly improved from 80% to 81%, as fewer outage days of SLPGC offset the 77-day planned maintenance outage of SCPC Unit 2.

Total average capacity during running days increased by 17%, from 685 MW to 801 MW, due to the restoration of SCPC Unit 2’s dependable capacity to 300 MW on May 27, along with reduced deration in SLPGC plants.

Total gross generation improved by 12%, from 1,212 GWh to 1,352 GWh, driven by higher SLPGC plant availability and average capacity, along with the restored capacity of SCPC Unit 2.
Higher gross generation led to a 12% increase in total power sales, rising from 1,097 GWh to 1,228 GWh. Majority (59%) of the generated electricity was sold to the spot market, with the remainder sold through bilateral contract quantities (BCQ).

Spot market ASP fell by 12% from P7.11/kWh to P6.25/kWh, while BCQ ASP increased by 2%, from P4.52/kWh to P4.62/kWh.
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At the end of the second quarter, only 33% of the 840MW dependable capacity of SCPC and SLPGC are contracted. Net of station service, which varies from time to time, SMPC has 481.6MW available for sale to the spot market.