Semirara expects record profits

By Neil Jerome C. Morales (The Philippine Star) Updated April 02, 2012 12:00 AM


MANILA, Philippines - Semirara Mining Corp., the unit of the Consunji family’s listed flagship firm DMCI Holdings Inc., expects its profits to reach a new record high at nearly P7 billion this year on the back of higher electricity sales.


Net income of Semirara is projected to grow by another 10 to 15 percent this year, Semirara chief executive Isidro A. Consunji said.


Consolidated net income reached P6 billion last year, up nearly 52 percent from P3.95 billion a year ago due to increased selling prices of coal and more electricity output.


Consunji said the company should produce more power this year and the next.


Semirara, through subsidiary SEM Calaca Power Corp., will complete this year the rehabilitation of the 600-megawatt (MW) coal-fired power plant in Calaca, Batangas. The power plant, which was acquired in 2009 for $361.7 million, will operate at a capacity of 550 MW from 340 MW.


Meanwhile, the $450-million, two 150-MW coal-fired thermal power plants of Semirara in Calaca, Batangas will start commercial operations next year.


The expansion of the power plant is in line with the group’s objective of churning out a total of 1,550 MW of power by 2013 from nothing in 2009.


Consunji said Semirara might supply the 300-MW plant’s output to Manila Electric Co. (Meralco), the country’s largest power distributor.


Higher output will offset lower electricity prices in the Wholesale Electricity Spot Market.


“It should be lower this year. I think private sector is more efficient than before,” Consunji said.


“The plants are producing more electricity because they are maintained. There should be lowering of prices,” Consunji added.


For the coal business, Semirara expects the same performance compared with last year.


“Flat (production) at seven million tons last year and seven million tons this year,” Consunji said.


“Last year, we sold more coal locally because the local demand is improving,” he said.


The listed firm operates a coal mine in Semirara Island in Antique. Coal output is sold to the National Power Corp. and is exported to countries like China, India, Thailand, Hong Kong, and South Korea.


Aside from the Calaca expansion, Semirara will allot $60 million in capital for regular items.


Consunji said the company will build a 15-MW power plant worth $30 million and spend $30 million for refleeting that includes the purchase of new trucks.


Semirara has fully secured its funding requirements for this year.


“We are already done, we raised it last year during the follow-on equity offering then we borrowed this year,” Consunji said.


In February, subsidiary Southwest Luzon Power Generation Corp. borrowed a total of P11.5 billion from BDO Unibank Inc., Bank of the Philippine Islands and China Banking Corp. to fund the construction and operation of coal-fired thermal power plant.