Semirara Jan-Sept profits soared on higher coal prices, energy sales

Integrated energy company Semirara Mining and Power Corp. (SMPC) posted another record profit as its bottom line for the first nine months of the year rose by more than twofold, sustained by higher energy sales and production.

The Consunji-led led company said consolidated January to September net income increased by 250 percent to P36 billion from P10.3 billion in the same period a year prior.

This represented an increment of 122 percent from the full year P16.2 billion net income recorded in 2021.

All-time high coal production and higher spot electricity sales at elevated prices were the main drivers behind the strong financial performance for the period.

“Historically, the third quarter is our slowest because of the rainy season and sluggish demand. But because of improved market prices, we did much better than expected,” SMPC president and COO Maria Cristina Gotianun said.

Coal production expanded by 27 percent to 13.7 million metric tons (MMT) from 10.8 MMT “due to controlled water seepage levels in the Molave mine and better coal access in East Block 4 and South Block 5,” the firm said.

Global supply disruptions

Average selling prices of coal surged by 122 percent to P5,224 per metric ton (MT) from P2,351 per MT as global index prices swelled following Russia’s invasion of Ukraine early this year.

It noted the average Newcastle prices rose by 216 percent to $353.80 while the average Indonesian Coal Index 4 increased by 50 percent to $84.30.

“Global coal price indices are expected to remain elevated in the next three to six months following the La Nina-triggered supply disruption in Newcastle (Australia) and [as] major economies’ pivot away from Russian coal. China, India and some Southeast Asian countries have also been increasing their coal-fired plants capacity in preparation for the winter or heating season,” SMPC said in its quarterly report.

For the full year, it is expecting Newcastle prices to rise by 166 percent to $364.7 due to supply and demand disruptions.

SMPC’s power business saw a 216-percent increase in spot market sales, rising to 1,546 gigawatt-hours (GWh) from 489 GWh, owing to a 5-percent uptick in plant availability, 7-percent improvement in gross generation and the pivot away from bilateral contracts.

Further, its average spot selling price climbed by 38 percent to P7.33 from P5.30 on the back of recovering demand, higher fuel costs and thin power supply margins.

SMPC is anticipating full-year average Wholesale Electricity Spot Market prices to inch up by 50 percent to P7.26 per kilowatt hour. INQ