Published July 3, 2020,
10:00 PM by Myrna M. Velasco
Owing it to realities
that this year will be an extremely difficult stretch for the company, the
Consunji-led Semirara Mining and Power Corporation (SMPC) indicated that it
will be re-scheduling P3.7 billion worth of capital expenditure (capex)
projects to next year due to “unprecedented disruption” posed by the
coronavirus pandemic.
SMPC Chairman and CEO
Isidro A. Consunji announced during their July 3 annual stockholders meeting
that despite the deferment of this year’s programmed capex, the company remains
in a strong financial position to withstand the devastating economic impact of
the health crisis.
“Though cash
flows are tight, we believe we can manage,” he stressed, noting that the firm
would “be able to meet cash-fixed cost obligations to creditors and dues to the
government.”
Consunji added the
company has P5.0 billion worth of short-term loans and P16 billion worth of
long-term financial obligations that it intends to pare this year, and it will
be partly utilizing internally generated cash for that.
On top of that, he
said, “we have more than enough credit lines that we can tap,” emphasizing that
the company has P39 billion unused credit line as of end-March this year.
SMPC similarly paid
P5.3 billion cash dividend to its shareholders this March 2020, and Consunji
stated that in line with their prudent step for cash preservation the
company would be able to meet its minimum cash dividend obligation to
shareholders” for next year.
The firm said it will
also defer hiring for non-core positions; reduce non-essential business
expenses and it shall opt for disposal of non-core assets.
Maria Cristina C.
Gotianun, president and chief operating officer of SMPC, further reported that
the company successfully completed the P10 billion life extension program for
their 600-megawatt Sem-Calaca Power Corporation (SCPC) coal-fired power plant
in Batangas and had been able to bring back and uprate the generating
efficiencies of the two units of the facility at the level of their 300MW
installed capacities.
The generating unit one
of the plant returned to commercial operations in September last year; while
the second unit had been synchronized back to the grid in May this year.
On the 20-percent drop
in SMPC’s income last year, Gotianun said profitability had been pulled down by
the SCPC plant’s shutdown last year; despite the higher electricity spot market
prices and the all-time high generation of its other power plant – the
Southwest Luzon Power Generation Corporation – which turned in an output of
2,070 gigawatt hours (GWh) last year.
At the company’s
Semirara coal mine, she noted that “we accomplished the fastest large-scale
mine rehabilitation initiative in the Philippines.” Although for this year, the
tumbling international coal prices may still largely affect overall bottom
line.
And while the company
concentrates on keeping operations afloat while sorting out efficient cash
preservation, Gotianun emphasized that their other key focus would be the
welfare of their employees – including the need to ensure their benefits as
well as health and safety, especially those who are manning their operating assets.
At the height of the
lockdown within March to May, the company said it released P350 million worth
of salaries and pro-rated 13-month pay to guarantee that their workers will
have cash resources to survive the financially crashing blow of the pandemic.
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