SMPC profit soars 552% to P15-B

Published May 6, 2022, 5:14 PM

by Myrna M. Velasco

The consolidated net income of Consunji-led Semirara Mining and Power Corporation (SMPC) soared by an all-time high 552 percent in the first quarter to P15 billion versus last year’s P2.3 billion.

The company’s three-month income this year was already equivalent to roughly 93 percent of the aggregate P16.2 billion profit it logged for a full year in 2021.

With that astronomical rise in earnings, SMPC President and Chief Operating Officer Maria Cristina C. Gotianun noted “We had a record-setting first quarter because of strong operating results and stronger-than-expected market conditions.”

She, nevertheless, qualified “We do not see this turning into a trend because of market volatility and unfavorable weather conditions, particularly in the second half of 2022.”

The company mainly attributed its extraordinary profitability “to record-high coal production and shipment amid soaring global coal prices, coupled with higher spot electricity sales at elevated prices.”

On the backdrop of geopolitical events that triggered surge in international fuel prices, the average selling price of coal skyrocketed by 180 percent to P5,125 from P1,829 per ton.

“Newcastle coal prices nearly tripled (197 percent) in the first quarter owing to strengthening global demand, heavy rainfall in Australia and bans on Russian coal. Meanwhile, ICI4 (Indonesian Coal Index) rose by 99-percent due to the coal export ban imposed by Indonesia,” the company explained.

The Consunji firm added “with record production, total shipments grew by 31 percent from 3.9 million metric tons to 5.1 MMT,” emphasizing that “controlled water seepage levels in Molave mine and favorable weather conditions allowed SMPC to boost production by 49 percent from 4.5 MMT to 6.7 MMT, the highest for any given quarter.”

As a result, SMPC’s coal business segment contribution expanded by 678 percent to P13 billion from year ago’s comparatively modest level of P1.7 billion.

On the firm’s power generation venture, the SEM-Calaca plant registered remarkable 33,980-percent upturn to P1.7 billion from a measly P5 million within the same January-March period last year while its Southwest Luzon Power Generation Corporation (SLPGC) facility fetched P307 million in net income, a 50 percent decline from P620 million.

“Providing added boost to group profitability was the power segment which benefited from surging electricity prices on the back of higher gross generation and sales, large uncontracted capacity and rebounding demand,” SMPC stressed.

The firm’s overall gross generation improved by 5 percent to 907 gigawatt-hours from 862 GWh while total power sales had gone up by 14 percent to 908 GWh from 796 GWh and 57-percent of that had been sold via the spot market.