The combination of tumbling coal demand and softening of electricity prices had chopped the net income of Consunji-led Semirara Mining and Power Corporation (SMPC) to P2.2 billion in the first half, down by 61-percent from last year’s P5.7 billion.
For the second quarter alone, the company’s profitability as calculated after tax had been at P1.0 billion, substantially truncated from P3.67 billion in the same period last year.
As explained by SMPC President and COO Cristina C. Gotianun, the company “saw historic dips in prices, particularly in April when global Newcastle coal prices reached US$49.30 per metric ton, the sharpest drop in 6 years.”
The downtrend in prices at the country’s Wholesale Electricity Spot Market (WESM), primarily when the lockdown was at its strictest in April, likewise contributed to the Consunji firm’s overall decline in earnings.
Gotianun particularly noted the unprecedented drop in spot prices on that month to P1.40 per kilowatt hour (kWh) vis-à-vis a high of P6.71 per kWh in a comparative period in 2019.
In terms of volume on coal sales, SMPC indicated that this contracted 27-percent to 5.7 million metric tons (MT) versus a healthier plinth of 7.9 million MT a year ago.
The company further noted decline in the selling price of coal commodity – which plunged to P1,765 per MT this year from P2,229 per MT in 2019.
In the power generation segment, SMPC described financial outcome as “a mixed bag” for its generating facilities operated by Sem-Calaca Power Corporation (SCPC) and Southwest Luzon Power Generation Corporation (SLPGC).
For its SCPC plant, the company noted that there was “a dramatic turnaround” on its income contribution to parent firm amounting to P726 million, a complete reverse of the P242 million losses it logged in the same period last year.
“The improvement was mainly attributable to higher energy sales, which grew 22-percent from 899 GWhr (gigawatt hours) to 1,095 GWhr,” the company emphasized.
SMPC added “sales volume improved following the completion of its life extension program for units 1 and 2, which allowed the company to reduce its outages by 53-percent year-on-year from 5,879 hours to 2,750 hours.”
Conversely for its SLGPC plant, financial performance had been dismal having posted P236 million losses in the initial six months versus an income of P1.6 billion in the same stretch last year.
According to the company, that was “due to the combined effect of a 43-percent drop in energy sales from 856 GWhr to 489 GWhr and a 38-percent cut in average selling price from P4.73 per kWh to P2.92 per kWh.”