Semirara profits surge to record on strong coal sales

Record-high domestic coal sales more than doubled Semirara Mining and Power Corp.’s (SMPC) profits in 2022, with the firm ending the year with an all-time high of P39.9 billion in consolidated net income.

This is 146 percent higher than the integrated energy company’s P16.2-billion net income in 2021, thanks to 7.7 million metric tons (MT) in domestic coal shipments, a 33-percent spike from the previous 5.8 million MT.

“Last year, we focused on the Philippine, South Korean and other Asean (Association of Southeast Asian Nations) markets to lessen our dependence on China, which had been importing heavily discounted Russian coal,” SMPC president and COO Maria Cristina Gotianun said in a statement on Tuesday. “Diversifying our market focus allowed us to get the best price for our inventory.”

Electricity sales

Spot electricity sales from the company’s subsidiaries rose by 83 percent to 1,881 gigawatt hours (GWh) from 1,028 GWh.

Soaring index prices and sale of higher-grade coal increased Semirara’s average selling price (ASP) of coal by 91 percent from P2,695 to a record of P5,136.

October to December 2022 coal sales climbed to 3 million MT from 2.5 million MT on the back of a 73-percent rebound in domestic shipments, from 1.1 million MT to 1.9 million MT, the company said. Semirara coal’s ASP increased by 9 percent to P4,861 from P4,452 because of elevated market prices during the same period.

Thin supply-demand margins and higher fuel costs, meanwhile, expanded SMPC’s spot electricity ASP to P7.46 per kilowatt hour (kWh) from P5.51 per kWh.

SMPC also suffered headwinds in the fourth quarter of 2022, with a 34-percent drop in consolidated net income from P5.9 billion to P3.9 billion “mainly due to higher stripping costs, lower average foreign exchange rate and an income tax and related expense of P1 billion in relation to the deferral of the Molave mine income tax holiday for the year 2020,” extending the company’s tax break until 2023.

The Consunji-led firm had said it was targeting to produce 14.5 million MT of coal in 2023 as it expects a continuous demand. Its 2022 goal was 14.5 to 15.5 million MT. INQ