By James A. Loyola
Integrated energy company Semirara Mining and Power Corporation (SMPC) expects to sustain its financial growth in 2018 despite power plant shutdowns in the first quarter of the year.
In the first three months of the year, SMPC suffered from scheduled and unplanned shutdowns of its four power plants under Sem-Calaca Power Corporation (SCPC) and Southwest Luzon Power Generation Corporation (SLPGC).
Unit 2 of SCPC was offline for the most part of the quarter for scheduled preventive maintenance and technical inspection while Unit 2 of SLPGC was shut down for preventive maintenance work. Forced to go on unplanned shutdowns in early March were Unit 1 of SCPC and Unit 1 of SLPGC.
With the protracted shutdown of SLPGC Unit 1, SMPC began purchasing replacement power from the Wholesale Electricity Spot Market in the last week of March which had minimal impact on its first quarter earnings.
“Even with the plant shutdowns, we are on track to deliver full year growth. We expect to offset our replacement power costs in the succeeding quarters from our insurance claim,” said SMPC president Victor A. Consunji.
SLPGC has business interruption insurance that covers the loss of business income as a result of damage to the insured asset. The final amount will still be determined by the insurance adjuster appointed by SLPGC’s reinsurers but SMPC expects that it will substantially reduce the impact of replacement power costs to SLPGC’s profitability.
Consunji also explained that the generated output of SLPGC Unit 2 is enough to serve the contracted capacity of SLPGC, except for a few hours during peak demand or as needed by its offtakers.
SMPC is optimistic that its coal segment can drive earnings upward despite the downward pressure from its power segment.
“We anticipate higher coal sales this year because of healthy demand from local and international consumers. The foreign exchange rate and strong coal prices will also prop up our bottom line,” said Consunji.