Monday, December 28, 2009

Stock Pick: Semirara Mining Corp.

Recommendation: BUY/ ACCUMULATE

Semirara Mining Corp.
December 23, 2008 = 100
Share Price51
High (past 52 weeks)51
Low (past 52 weeks)22.25
Market Cap. (M)14,156.21
Price-Earnings Ratio10.98
Earnings Per Share2.87
Source: Technistock

INVESTORS are advised to accumulate shares of coal producer Semirara Mining Corp. as the stock remains relatively cheaper than any other mining stock, AB Capital Securities, Inc. said.
“The stock is cheaper at a price-earnings ratio of 10x and this makes Semirara shares a good buy,” said Prince Anthony A. Yeung, an analyst at the brokerage firm.
Mr. Yeung also said a possible pullback in the Philippine Stock Exchange index (PSEi), which already broke the 3,000 level this year, is likely so that investors should start accumulating at this time.
Among others, Semirara has shown consistency in its business growth. Coal revenues in the nine months to September reached P9.2 billion surpassing 2008’s full-year sales of P8.5 billion. Its strong sales were due to increases in production volume and better selling prices.
“This trend has actually been observed for the last four years, where the company’s financial performance always equal or even breach its total sales for the previous year,” Mr. Yeung said.
An expanded market, higher volume of sales and an improvement in the quality of its products are contributing to Semirara’s growth.
Mr. Yeung estimates Semirara’s coal revenues to top P11 billion by yearend, translating to a net income of P1 billion.
While most of listed mining firms recorded net losses for the third quarter, Semirara bucked the trend by profiting P580.6 million during the July to September period, more than triple last year’s P172.8 million.
On Wednesday last week, shares of Semirara closed at its intraday high of P51 apiece, extending a rally for the third straight trading day.
Semirara shares have gained by 43.7% so far this year from just P35.50 apiece at the first trading day of January. The stock price, however, is 1.9% off its 52-week high of P52 recorded on Dec. 1.
Semirara is also set to mine an additional 7,200 hectares in Caluya and Sibay Islands in Antique, after the Department of Energy (DoE) approved its application to amend its coal operating contract (COC) last week.
In a Dec. 21 disclosure to the stock exchange, the DMCI Holdings, Inc. unit said the DoE had approved the amendment of the company’s COC No. 5 to add 3,000 hectares in Caluya Island and another 4,200 hectares in Sibay Island, both in Antique.

Tuesday, December 22, 2009

DOE okays Semirara coal project in Antique

By Donnabelle L. Gatdula (The Philippine Star) Updated December 22, 2009 12:00 AM Comments (0) View comments

MANILA, Philippines - The Department of Energy (DOE) has allowed Semirara  Mining Corp., owned by the Consunji family, to mine and develop coal in Caluya and Sibay Islands in Antique. In a disclosure to the Philippine Stock Exchange, Semi-rara said it would explore 24 areas, covering the second  amendment of its coal operating contract (COC) No. 5  which  includes a land area of  3,000 and 4,200 hectares in  Caluya and Sibay Islands, respectively.
Based on Semirara’s original coal contract, it could develop only about 5,500 hectares in Semirara Island.
“The request for amendment of COC 5 contract area is the result of the operator’s geophysical and reconnaissance evaluation of the presence of coal occurences in Sibay and Caluya Islands,”
the amended agreement said. The DOE said it found Semirara’s request for amendment as “meritorious” and directed the company to pay P400,000 in two tranches “in consideration of the  amendment to the contract.”
Earlier, the DOE also approved the extension of Semirara’s contract in Antique by another 15 years from July 13, 2012 up to July 24, 2027. The contract covers 13 blocks in Semirara Island.
Semirara is the country’s largest local coal company in the country. It is mainly engaged in the exploration,  mining, development and sale of coal resources.
Semirara started to supply coal to power the 600-megawatt Calaca coal plant in Batangas, now also owned by the Consunji Group. Currently, Semirara is one of the four major business interests of DMCI Holdings Inc., the investment vehicle which consolidates all construction business, construction component companies and related interests of the Consunji Family.
The other major DMCI units are D.M. Consunji Inc., DMCI Project Developers Inc. and Atlantic Gulf and Pacific Co. of Manila Inc. (AG&P).

Gov’t expands Semirara Mining’s coal contract

By Amy R. Remo
Philippine Daily Inquirer
First Posted 22:20:00 12/21/2009

Filed Under: Government, Mining and quarrying, Energy

THE DEPARTMENT OF ENERGY HAS expanded the coal operating contract of Semirara Mining Corp. to include some 7,200 hectares of prospective coal-rich areas on the Sibay and Caluya Islands.
In a disclosure to the Philippine Stock Exchange, Semirara said the amendment to COC No. 5 was the “result of the (company’s) geophysical and geological reconnaissance evaluation of the presence of coal occurrences in Sibay and Caluya Islands.”
The amendment also brought the total land area under Semirara’s COC No. 5 to 12,700 hectares.
In June, the energy department granted Semirara a coal reconnaissance permit covering 24 coal blocks on Sibay and Caluya Islands in Antique. After two months, Semirara requested the DOE to amend its COC to include the additional coal areas.
The DOE amended the contract to cover 5,500 hectares (14 coal blocks) on Semirara Island; 3,000 hectares (nine coal blocks) on Caluya Island, and 4,200 hectares (12 coal blocks) in Sibay Island.
“In view of the amendment, the operator will provide P400,000 in assistance in-kind to the DOE to be paid in two equal tranches,” document showed.
Last year, the DOE had extended the company’s contract by another 15 years, giving it the exclusive right to explore, develop and mine for coal on Semirara Island until 2027.
The government, through the now-defunct Energy Development Board, awarded a 35-year contract to another company in July 1977. This was later assigned to Semirara.
Recently, Semirara Mining, through its wholly owned subsidiary, paid Power Sector Assets and Liabilities Management Corp. $150.8 million, representing the down payment for the 600-megawatt Calaca coal power plant.