It isn’t a rosy year for Consunji-led Semirara Mining and Power Corporation (SMPC), as its first half income suffered 34 percent downswing to P12.6 billion from a record P19.2 billion within the same six-month stretch in 2023 – and that was mainly precipitated by the apparent weakening of coal prices.

Within the second quarter, the company’s profitability likewise declined by 41% to P6.0 billion versus P10.2 billion a year ago, as coal commodities continue to track price plunge in recent months.

Amid waning financial outcome though, SMPC reported 73% escalation in coal production to 5.0 million metric ton (MMT) versus 3.0 MMT a year ago; and that was primarily attributed to “lower rainfall levels “ as well as the near-depletion of its Molave mine which somehow triggered “low base effect” last year.

SMPC President and COO Maria Cristina C. Gotianun said “despite our efforts to manage costs and improve operational efficiencies, the persistent decline in global coal and electricity prices has significantly impacted our financial performance.”

The company further noted that within April-June this year, average prices as referenced on the Newcastle index (NEWC) and Indonesian Coal index 4 (ICI4) dwindled by a considerable 16%.

It was specified that average NEWC coal prices had been slashed to $135.6 from $160.7 per metric ton; while ICI4 declined to $55 from $65.1 per MT on average within a comparative period last year.

On coal sales within the second quarter, the company posted slight 2% increase in shipments to 4.6 million metric tons (MT) from last year’s 4.5 MMT, owing to stronger market demand.

The domestic market also remained robust, with shipments escalating by 16% to 2.2 MMT as against 1.9MMT in the prior year, with SMPC qualifying that such was mainly driven by higher demand of its power generation subsidiaries – primarily the power plants under SEM-Calaca Power Corp and Southwest Luzon Power Generation Corp.

The company’s average selling prices in the second quarter likewise tumbled 33% to P2,780 per MT from heftier P4,151 per MT a year ago, expounding that “this decrease was due to stabilizing coal indices and an increased demand for non-commercial grade coal, which is sold at a lower price.”

Onward to the second half, Gotianun indicated that market signals “should be more of the same for us in terms of coal prices,” emphasizing that “we also expect coal production, electricity demand and spot prices to taper because of the rainy season.”

On the company’s power generation business, it logged higher plant availability on the scale of 80 to 81% due to fewer outage incidents; as well as the restoration of unit 2 of its Sem-Calaca coal plant.

Gross electricity generation from SMPC’s two plants also went up 12% to 1,352 gigawatt-hours (GWh) compared to leaner 1,212 GWh last year – and the bulk of that at 59% had been traded via the Wholesale Electricity Spot Market (WESM) while the balance of generated capacities are covered by bilateral contracts.