As coal prices in the world market cooled, the net income of Semirara Mining and Power Corporation (SMPC) dropped 28% to P6.5 billion within first quarter this 2024 from a relatively robust P9.0 billion earnings in the same three-month period last year.

“Global coal indices declined due to weak demand from developed countries, driven by changes in energy policies, a shift toward renewable sources and slowing economic activities,” the Consunji-led firm noted.

In particular, SMPC stated that the Newcastle index nosedived to $126 within January to March this year, an equivalent of 49% dip from year ago’s $247.8; while Indonesian coal also tapered off by 25% to $57.2 versus last year’s $76.5.

Within the quarter, the company indicated that lower prices in the Wholesale Electricity Spot Market (WESM) similarly contributed to the tumble in SMPC’s earnings within January to March this year.

According to the Consunji firm, spot prices had been lower by 27% to P4.61 per kilowatt hour (kWh) on average from last year’s P6.28 per kWh – mainly due to “lower fuel costs and increased supply.”

Nevertheless, SMPC President and COO Maria Cristina C. Gotianun emphasized that despite the challenges, “our robust export sales and improved plant performance demonstrate the resilience and adaptability of our operations.”

For coal lifted from its Semirara mine, SMPC reported 37% hike in overall sales to 4.8 million metric tons (MMT) versus 3.5MMT last year – and the bulk of 78% accounted for exports which reached 2.7MMT against 1.5MMT a year ago.

Procurement of domestic clients had likewise expanded by 6.0% to 2.1 MMT, with SMPC noting that its plants logged “highest availability” within the period at gross generation of 1,408 gigawatt-hours (GWh) from 1,316 GWh last year.

“This growth was primarily due to higher bilateral contract quantity sales, which offset the decline in spot market dispatch for the period,” the company stated.

For its contracted capacities, SMPC conveyed that sales inched up 38% to 499 GWh vis-à-vis last year’s 361 GWh; while sales via the spot market had been lower by 11% to 782 GWh from heftier 880GWh the previous year.

In the company’s annual stockholders’ meeting on Monday (May 6), Gotianun asserted that “as market prices and demand stabilize, our focus shifts towards boosting coal exports and plant availability.”

Part of the cost management strategies to be enforced by the company, she said, would be shoring up the capacity of the unit 2 of its Sem-Calaca coal plant to its optimized generation of 300MW – that will be an increase from last year’s average availability of 175MW.

By early next year, the company is also expecting the commercial operations of its 12MW wind farm in Semirara island; which in turn will help boost revenues and income.

“We anticipate strong performance from the power segment, potentially offsetting anticipated weakness in the coal business due to unfavorable market conditions,” she stressed.