May 15, 2019 | 12:07 am By Victor V. Saulon, Sub-Editor
SEMIRARA Mining and Power Corp.
(SMPC) reported a 49% drop in first-quarter net income to P2.33 billion from
P4.57 billion as the selling prices of coal and power, the company’s sources of
revenues, decreased during the period.
In a disclosure to the stock
exchange, the Consunji-led company said the coal segment of the business, net
of eliminations, and energy subsidiary Southwest Luzon Power Generation Corp.
(SLPGC) contributed P2.13 billion and P226.10 million, respectively. SMPC unit
Sem-Calaca Power Corp. (SCPC) posted a net loss of P22.37 million in the first
quarter.
The listed integrated energy company
said coal production slipped by nearly 2% to 4.06 million tons from 4.12
million tons in the same period last year, with the 37% increase in the strip
ratio to 12.53 from 9.12 a year ago.
Export sales rose, lifting total
coal sales by 4% to 3.55 million tons compared with 3.42 million tons
previously. The drop in global coal prices resulted in an 18% decrease in the
average selling price of coal to P2,272 per ton from P2,786 per ton a year ago.
Junalina S. Tabor, SMPC chief
finance officer, said this year’s prospects for coal would depend on the China
market, which dictates prices.
“Mahirap talaga siya i-predict
so much so that our exports is based on spot [prices], depende ’yun sa
China market, China traders kung ano talaga what they are offering to
us,” she said in a chance interview before the release of the quarterly
figures.
“So ’yung Newcastle index is
just used as our reference point so alam namin where can we negotiate up
to how high, how low,” she said. “But it’s really dictated by China market for
the export.”
Energy sales of SCPC and SLPGC
increased by 11% to 638 gigawatt-hours (GWh) in the first quarter from 575 GWh
in the same period last year. Softer global coal prices also affected power
average selling price, which declined by 19% to P4.32 per kilowatt-hour (kWh)
from P5.35 per kWh a year ago.
Total power generation during the
quarter fell to 508 GWh from 642 GWh, the listed company said. SCPC’s unit 1 is
on a six-month life extension program (LEP) since Dec. 30, 2018.
“LEP is a cost-effective strategy to
maintain and upgrade operations of existing facilities beyond its traditional
lifetime, at the same time to limit environmental complications and financial
risks,” the company said.
SCPC’s unit 2 will also undergo LEP
as soon as unit 1 becomes commercially available. The plant’s outages and
deration during the quarter were due to boiler tube leaks and repair of
condenser.
SLPGC’s unit 3 was also down for a
total of 29 days in the first quarter, mostly due to boiler issues. Its unit 4
was placed on maintenance shutdown after experiencing tube leaks in
mid-January. The incident advanced the planned maintenance shutdown for the
middle of the year. There are no other planned outages for the unit for the
rest of the year, the company said.
The power segment incurred a total
loss of P95 million for purchases of replacement power totaling to 216 GWh in
first quarter.
Ms. Tabor said the prospects are
better this year because of the higher prices at the spot market, to which the
company sells its excess power capacity.
On Tuesday, shares in SMPC closed
higher by 3% to close at P22.35 each.
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