SMPC net income falls 30% due to falling prices
Consunji-led Semirara Mining and Power Corporation (SMPC) reported a drop in its net income in 2024 due to weaker selling prices.
In a disclosure to the Philippine Stock Exchange on Monday, March 3, SMPC said its net income decreased by 30 percent to ₱19.6 billion last year from ₱27.9 billion in 2023. This was driven by weaker selling prices amid a normalized energy market.
According to SMPC, its coal shipments and power generation helped soften the impact of the net income decline.
“The coal segment contributed 57 percent of total net income, followed by Sem-Calaca Power Corporation (SCPC) at 29 percent and Southwest Luzon Power Generation Corporation (SLPGC) at 14 percent,” noted SMPC, a subsidiary of DMCI Holdings Inc.
Its total revenues also fell by 15 percent to ₱65 billion, as coal and electricity prices dropped; however, they were partially offset by increased sales volume in 2024.
SMPC’s total cash costs fell by nine percent to ₱37 billion, while the costs for coal and electricity production remained almost unchanged at ₱26 billion. Increased costs from coal shipments were neutralized by lower fuel costs and reduced power purchases.
Additionally, the firm’s government share dropped from ₱10.68 billion to ₱6.38 billion as a result of lower coal revenues and margins.
Its earnings before interest, taxes, depreciation, and amortization (EBITDA) also declined from ₱35.75 billion to ₱27.75 billion.
On the other hand, the company’s operating expenses (OPEX) grew by 12 percent from ₱4.3 billion to ₱4.81 billion as 2024 brought higher taxes, insurance premiums, maintenance, and office renovations.
Coal performance
During the fourth quarter of 2024, coal’s revenues dipped from ₱17.38 billion to ₱11.8 billion as selling prices and shipment volumes slowed down, while its net income also decreased by 26 percent to ₱3.36 billion.
According to SMPC, reduced shipments were observed after total coal sales volume declined by 19 percent, from 5.3 million metric tons (MMT) to 4.3 MMT, due to lower foreign shipments.
Subsequently, coal production was also down from 4.2 MMT to 2.9 MMT as Narra mine North Block 4 and West Block 2 began their pre-stripping works.
Throughout the year, its total production stood at 16 MMT.
Meanwhile, its overall coal inventory dropped by 50 percent due to record shipments in that same year plus the lower quarterly production.
Power performance
Despite significant decreases found in SMPC’s coal performance, its power segment revenues climbed by 10 percent from ₱4.63 billion to ₱5.08 billion.
SMPC attributed this increase to “improved average capacity and electricity sales, despite a three-percent decline in average selling prices (ASP).”
The ASP also saw a marginal decrease of ₱4.16 per kilowatt-hour (kWh).
Meanwhile, cash costs also rose by 23 percent to ₱3.73 billion.
“Higher generation costs, increased replacement power purchase, and rising OPEX [caused the growth],” SMPC stated.
The firm’s power segment brought in positive financial performance with improved average capacity, as it increased from 682 megawatts (MW) to 778 MW.
“[This followed the] restoration of SCPC Unit 2’s dependable capacity to 300 MW on May 27, tempered by occasional deration of the plants.”
Its plant availability also decreased due to planned maintenance at SLPGC.
However, SCPC’s plant availability grew by 83 percent.
“Despite lower plant availability, gross generation rose by 8 percent, from 1,195 gigawatt-hours (GWh) to 1,290 GWh, largely driven by improvement in SCPC availability and average capacity. Consequently, total power sales grew by 13 percent, from 1,078 GWh to 1,223 GWh,” SMPC said.
Furthermore, SCPC’s revenues grew to ₱3.74 billion, while SLPGC revenues declined by 25 percent due to its lower plant availability and weaker selling prices.