PSE okays stock rights offering of Semirara

By Zinnia B. Dela Peña (The Philippine Star) Updated June 12, 2010 12:00 AM Comments (0)

MANILA, Philippines - The Philippine Stock Exchange has approved the listing application of Semirara Mining Corp. for its planned stock rights offering amounting to around P4.15 billion.
Semirara, which is 56 percent owned by Consunji holding firm DMCI Holdings Inc., is offering a total of 59.375 million shares to stockholders at a ratio of one new common share for every five common shares held as of July 1. The shares will be sold at P74 each, a price which which was arrived at using the volume weighted average price of the company’s common shares covering the 15-trading day.
Net proceeds from the offering, which will run from July 5 to 9, will be used to partially finance theacquisition of the 600-megawatt (MW) Calaca coal-fired power plant in Batangas, through its wholly-owned subsidiary, SEM-Calaca Power Corp. Around P2.7 billion will be needed by the company for this.
The Calaca facility consists of two 300-MW generating units designed to run as a base load plant and designed to use local coal from Semirara.
Semirara’s total investments for the Calaca facility are estimated to reach $483.6 million, which include the acquisition cost of $361.7 million. The remaining $121.89 million had been allocated for the rehabilitation and working capital requirements of the power plant.
The company is also setting aside P1.63 billion out of the expected proceeds for payment of various bank loans. Around P890 million will be used for the purchase of mining equipment, tugboats and barges.
In December last year, Semirara paid the state-owned Power Sector Assets and Liabilities Management Corp. (PSALM) $150.8 million as downpayment for the coal facility.
BDO Capital & Investment Corp. has been tapped as the lead underwriter for the offering.

DMCI Holdings earns P1.4 billion in Q1, up by 81%

By JAMES A. LOYOLA

May 18, 2010, 3:49pm

DMCI Holdings, Inc. reported a jump of 81 percent in its first quarter consolidated net income to P1.4 billion in 2010 from P775 million in 2009.

In a disclosure to the Philippine Stock Exchange, the firm said significant growth in the construction and mining business along with the maintained results in the real estate segment and the water investment all contributed to the impressive bottom line.

For the period, the construction was the main driver of growth for DMCI due to the revenues recognized from works on the new big ticket projects.

Also, the mining business, particularly coal mining, doubled contributions as coal deliveries to both exports and domestic customers picked up. Water and real estate registered marginal but respectable improvements as well.

Despite a spike in operations, first quarter net contributions from the water business (Maynilad Water Services) reported a sustained amount of P391 million in 2010 compared to P337 million in 2009, due much to the consortium adjustments recognized which extraordinarily increased 2009 first quarter income.

The construction business more than tripled its net contributions for the period from P145 million last year to P500 million this year as general construction and engineering works from local buildings and domestic infrastructure projects coupled by foreign steel fabrication contracts boosted revenues.

The general construction unit, operated under wholly-owned, D.M. Consunji, Inc. (DMCI), tripled net contributions to P390 million as construction and engineering works from the new big ticket projects were essentially started in the second half of 2009.

DMCI’s coal mining business and its major power generating asset (Calaca), both lodged under 58.8 percent-owned Semirara Mining Corporation, reported an improvement in first quarter operating results from a net income of P298 million in 2009 to P594 million in 2010 providing an 80% growth in net contribution from P173 million to P312 respectively.

The Company’s real estate business, under the brand name DMCI Homes, recognized a 24 percent increase in net contributions for the period from P134 million last year to P166 million this year despite a 31 percent drop in realized revenues.

DMCI’s steel fabrication business, 98 percent-owned Atlantic Gulf and Pacific Company of Manila, Inc. (AG&P), reported a remarkable growth of 7.3 times in first quarter net contributions from P15 million in 2009 to P110 million in 2010.

Stock Pick: Semirara Mining Corp.

Recommendation: BUY/ ACCUMULATE

Semirara Mining Corp. December 23, 2008 = 100
Share Price	51
High (past 52 weeks)	51
Low (past 52 weeks)	22.25
Market Cap. (M)	14,156.21
Price-Earnings Ratio	10.98
Earnings Per Share	2.87
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.

DOE okays Semirara coal project in Antique

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

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.

BPI allots P5 billion for sustainable energy-related projects

By Ted P. Torres (The Philippine Star) Updated November 07, 2009 12:00 AM

MANILA, Philippines - The Bank of the Philippine Islands (BPI) is prepared to extend to P5 billion in loans to sustainable energy-related activities.

The amount, which forms part of a risk sharing agreement with the International Finance Corp. (IFC), is the second tranche of an energy conservation program accord signed early this year.

The IFC is the private investment arm of the World Bank, has been increasing its assistance to activities related to sustainable energy and renewable energy. Its latest thrust is to tie up with domestic financial institutions for risk sharing activities.

So far, BPI has provided P1.2 billion in loans to renewable energy, sustainable energy and energy efficiency-related projects.

“It has been raised to P2 billion, but we are willing to go up to P5 billion,” Aurelio R. Montinola III, BPI president, said during the formal launching of the bank’s 2008 Sustainability Report. BPI is the first commercial bank in the Philippines to release report based on the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines.

It was learned that one borrower spent up to P300 million to improve its energy and energy-related facility for manufacturing.

Montinola said BPI, which is a member of the Ayala Group of Companies, has invested P100 million on energy efficient equipment for its head office and its 865 branches, business centers and remittance centers.

BPI plans to reduce the energy and water consumption of its head office by five percent.

It consumes roughly 34,909,398 kilowatthours (kWh) of electricity and 766,987 cubic meters of water yearly. This translates to roughly 16,225 tons of carbon emissions.

BPI has outlined 16 indicators for sustainability guided by its four strategic themes: total customer experience, reduction of environmental footprints, market expansion and employee engagement.

The bank is also looking at the transformation of all its branches to minimize its carbon footprint, to forge more partnerships with energy and environment conservation advocates such as the WorldWildLife Fund (WWF) and the IFC, as well as increase its involvement in microlending.

The joint venture is called BPI Globe Bangko, a savings bank (Bangko), it will service microfinance institutions (MFIs) for wholesale lending. It will not open branches, often referred to as bricks-and-mortar, but instead rely on mobile banking and the existing infrastructure of Globe to issue loans and receive deposits.

“BPI chose to embark on sustainability reporting in order to show its various stakeholders the bank’s commitment towards sustainability and corporate responsibility,” Montinola said.
He added that BPI would issue annual sustainability reports other than its annual financial reports “adding new quantifiable metrics to be able to progress to a higher level of application.”

DMCI nears completion of Calaca rehabilitation plan

By Donnabelle L. Gatdula (The Philippine Star) Updated September 01, 2009 12:00 AM Comments (0)

MANILA, Philippines - DMCI Holdings Inc., the investment arm of the Consunji group, is nearing the completion of a rehabilitation plan for its newly-acquired 600-megawatt (MW) Calaca coal-fired power plant.
DMCI Power Corp. president Nestor Dadivas said they are now in the final stages of coming up with a rehab program.
The group is awaiting the-turn over of the power plant from the government before they could proceed with the rehabilitation of the facility.
Discussions with the Power Sector Assets and Liabilities Management Corp. (PSALM), a government entity created to handle the sale of National Power Corp.’s assets, are ongoing, he said.
Dadivas said the rehabilitation of Calaca is necessary to maximize the capacity of the plant. Calaca has two units and are currently running at combined capacity of 350 MW.
The Calaca power plant consists of two 300-MW generating units and is primarily designed to run as a base-load plant. It is also designed to utilize local coal from Semirara Mining Corp., a subsidiary of DMCI Holdings.
“We’re studying the plant and we’re finalizing the rehabilitation program because now the plant is running at only around 350 MW,” Dadivas said.
The DMCI official said the group is currently raising the downpayment for the power facility. “We plan to finance it (down–payment) from internally-generated funds,” he said.


DMCI Holdings should be able to pay 40 percent of its bid price of $361.7 million to pave the way for the plant’s turnover.
“We have 270 days to pay the downpayment but PSALM has indicated that we do it sooner so we’re negotiating. Our target is March or April 2010 for the turnover,” Dadivas said.
Earlier, DMCI Holdings president Isidro Consunji said the company is likely to borrow from Banco de Oro to finance a portion of the acquisition price.
DMCI Holdings consolidates all construction business, construction component companies, and related interests of the Consunji family. Its core businesses include construction, real estate and coal mining.
It owns 56 percent of Semirara Mining Corp., which has exclusive rights to explore, mine and develop the coal resources on Semirara Island in Caluya, Antique.
The Calaca facility has been allocated a substantial 287-MW power supply contract, or about 48 percent of the plant’s rated capacity. This will provide DMCI a ready market for the electricity that the power plant will generate.
The Manila Electric Co. will assume the biggest portion of the contracted energy, which is equivalent to 169 MW.

DMCI wanted to solely operate the 600MW Calaca plant

MANILA, July 20 (PNA) — Consunji-owned DMCI Holdings has no plans to look for a partner in operating the 600 megawatt (MW) Calaca coal- fired power plant.

Isidro Consunji, DMCI president said that while they wanted to team-up with other firm, he explained that they are concern on any possible “internal arguments” in the future.

“We want to [get a partner]. But the problem is, if we entertain a new partner today then we might be having internal arguments on how to go forward, as our price is based on a certain strategy (i.e. we don’t intend to run it at 600-MW want to down it for the meantime to be able to rehabilitate what needs to be fixed). We also don’t want to run the plant at the maximum capacity as the plant is already and the wear might be accelerated. And if we get a new partner then we might have problems. Before entertain a partner, perhaps we need to assess where our directions,” Consunji said.

He added the main purpose of the acquiring the Calaca plant was primarily to complement the continued operations of the Semirara Mining Corp., which supplies the coal requirement of Calaca plant.

“Our strategy was defensive, why we had to bid. Prior to last year, we already expanded the Semirara’s capacity. Now we’re geared to 4 to 5 million tons a year. And Calaca represents 1.6 million tons of market. So if another wins then where do the 1.6 million tons go, and thus we will be forced to export,” he said.

He added “export price is lower than local price and will make our profitability suffer.”

During Semirara’s initial operation, Consunji said “99 percent of Semirara’s coal goes to Calaca and now we were able to bring it down to 20 percent.”

Likewise, Consunji said they are also not keen on utilizing the entire 600-MW capacity of Calaca which has a dependable capacity of 470MW even after rehabilitating and upgrading it.

According to Mr. Consunji, they are now in talks with various financial institution in particular the Banco de Oro to fund the US$ 361.7 million acquisition.

“BDO is one of the banks talking with us. We plan that it will be shared by Semirara and DMCI, but bulk of the equity would be Semirara since they are the biggest beneficiary,” he said.

DMCIHI has 56 percent stake in Semirara, which has exclusive rights to explore, mine and develop the coal resources on Semirara Island in Caluya, Antique.

DMCI’s offer defeated Thailand-based firm Banpu Power Limited.

Established in 1995, DMCIHI is engaged in construction business, construction component companies, and related interests of the Consunji family. Its core businesses include construction, real estate and coal mining.

Consunji said they expect the Power Sector and Assets Liabilities Management Corp. (PSALM) to issue the notice of award this week and in the next 270 days, the company will pay the 40 percent upfront payment.

National Power Corp. has attached around 287-MW supply contract to Calaca or an equivalent of 48 percent of the plant’s rated capacity.

Meanwhile, Consunji said once they have completed the acquisition of Calaca, they will enter the wholesale electricity spot market (WESM).

“We will participate in the WESM. And with the privatization of Calaca,” he said.

Last week, PSALM declared DMCIHI as the highest bidder for the Calaca plant and once the verification process is completed, they will be declared as the winning bidder. (PNA)

Semirara mercury safe, says coal firm

By Nestor P. Burgos Jr.
Inquirer Visayas
First Posted 01:06:00 06/17/2009

Filed Under: Environmental Issues, Pollution, Mining and quarrying

ILOILO CITY -- Semirara Mining Co. (SMC) has disputed findings of University of the Philippines scientists showing toxic levels of mercury in areas on Semirara Island in Antique.
Juniper Barroquillo, SMC administrative manager, said the company’s own studies had shown that mercury levels were within tolerable and safe levels.
Deadly element
“Their findings are wrong. We have already conducted monitoring on the mercury levels,” Barroquillo told the Philippine Daily Inquirer in a telephone interview on Monday.
Scientists and researchers from UP Visayas (UPV) said last week that soil samples taken from areas near the mining operations showed that the mercury content reached “moderate toxicity” level, which was safe to animals and humans.
Mercury poisoning could cause damage to the nervous system and permanently damage the brain, kidneys and fetuses, according to the scientists.
The samples, which were analyzed at the Research and Analytical Services Laboratory of the Natural Sciences Research Institute and the National Institute of Geological Sciences in UP Diliman, also showed high concentrations of coal in the soil especially at the mouth of the Suja Creek in Barangay Semirara, one of the three villages of the 5,500-hectare island.
Environmental groups and some islanders have blamed decades of coal mining operations for the massive siltation that has destroyed their coastal and marine resources, including mangroves.
Denied allegations
But SMC, which took over the mining operations from the government-owned Semirara Coal Corp. (SCC) in 1999, has repeatedly denied the allegations and pointed at old stockpiles of SCC as the cause of siltation.
The Department of Environment and Natural Resources (DENR) in Western Visayas issued conflicting reports on allegations of pollution on the island.
A report of its Community Environment Officer (Cenro) has belied allegations of siltation and death of mangroves.
But on February 15, the Environment and Management Bureau (EMB) of the DENR regional office recommended to the Pollution and Adjudication Board the issuance of a cease-and-desist order for SMC to close its coal washing plant.
‘Prima facie evidence’
The memo, issued by then regional director Bienvenido Lipayon, cited “prima facie evidence” that SMC was disposing of coal wastes into the Suja Creek and the sea.
The EMB has not reacted to the findings of the UP scientists. Oscar Cabanayan, EMB regional director, did not respond to repeated calls and text messages from the Inquirer.
Prevention
Barroquillo said SMC had taken steps to prevent further siltation from old coal stockpiles.
He said the company had also transferred its coal washing plant to the Panian mining pit at the cost of P200 million. It would be operational before the end of the month.