SMPC 9-month profit drops 23%

Business World - - Corporate News - Vic­tor V. Saulon

SEMIRARA Min­ing and Power Corp. (SMPC) re­ported a 23.3% fall in con­sol­i­dated net in­come to P8.9 bil­lion as of Septem­ber this year from P11.6 bil­lion a year ago as coal and en­ergy sales both de­clined dur­ing the pe­riod.

In a dis­clo­sure to the stock ex­change on Thurs­day, the Con­sunji-led in­te­grated en­ergy com­pany said the nine-month core profit of its coal busi­ness in­creased by 8.8% to P7.4 bil­lion from P6.8 bil­lion although those of its two power gen­er­a­tion sub­sidiaries de­clined by dou­ble dig­its.

Fig­ures for the third quar­ter alone were not im­me­di­ately dis­closed by SMPC, a ver­ti­cally in­te­grated power pro­ducer that mines its own fuel source, al­low­ing it to gen­er­ate af­ford­able baseload power.

Coal pro­duc­tion as of Septem­ber slipped by 10% to 8.9 mil­lion met­ric tons (MT) from 9.9 mil­lion MT a year ago.

“Con­tin­u­ous heavy rains in July and Au­gust caused slow­down in pro­duc­tion in the third quar­ter to 1.7 mil­lion MT from 4.1 mil­lion in the first quar­ter and 3.1 mil­lion MT in the sec­ond quar­ter of 2018,” the com­pany said.

“To max­i­mize ac­tiv­i­ties, de­spite the rains that ham­pered coal ex­trac­tion, op­er­a­tions fo­cused on waste strip­ping in the third quar­ter,” it added.

The move re­sulted in an in­crease in its strip ra­tio, or the amount of over­bur­den ma­te­ri­als over the amount of coal ex­tracted, to 12.4 bank cu­bic me­ters (BCM); 1 MT, which com­pares with last year’s 9.5 BCM:1 mt.

“Ad­vance ma­te­rial stripped dur­ing the quar­ter will ben­e­fit fu­ture pe­ri­ods as min­ing ac­tiv­i­ties move closer to coal seams,” the com­pany said.

The lower pro­duc­tion re­sulted in a 15% de­crease in coal sales to 8.3 mil­lion MT from 9.8 mil­lion MT. The de­cline came amid a 3% rise in do­mes­tic de­mand. Coal ex­port sales fell by 34% be­cause of lower pro­duc­tion.

Higher av­er­age sell­ing price per ton off­set the drop in sales vol­ume, re­sult­ing in a rise in coal rev­enues by 8.6% to P22.8 bil­lion from P21 bil­lion last year.

In the power busi­ness, SEMCalaca Power Corp.’s (SCPC) gross gen­er­a­tion dropped by 8.6% to 2,287 gi­gawatt-hours (GWh) from 2,503 GWh. The power plant’s sec­ond unit was on main­te­nance shut­down for the first three months of the year. Main­te­nance ac­tiv­i­ties spilled over up to the first week of April, the com­pany said.

The first unit had a con­tin­u­ous run up to the end of the third quar­ter ex­cept for a brief shut­down in March and a four-day shut­down in June.

SCPC’s sales vol­ume slipped 5.9% to 2,359 GWh from 2,508 GWh from the pre­vi­ous year. Still, the com­pany’s rev­enues in­creased by 4.3% to P9.8 bil­lion from P9.4 bil­lion be­cause of an 11% im­prove­ment in en­ergy prices.

South­west Lu­zon Power Gen­er­a­tion Corp. (SLPGC) recorded a big­ger drop in gross gen­er­a­tion at 44% to 773 GWh from 1,380 GWh.

SLPGC’s first unit was shut down on March 6 be­cause of an ac­ci­dent that re­sulted in a crack in the ro­tor. The plant re­sumed nor­mal op­er­a­tions in the last week of Septem­ber.

SLPGC power plants have ma­chin­ery break­down and busi­ness in­ter­rup­tion in­sur­ance cover. Its sec­ond unit had a sta­ble run start­ing on April 16 ex­cept for a dis­rup­tion in June due to trans­mis­sion line fault and two emer­gency out­ages to­tal­ing to 19.5 hours in Septem­ber. It has been gen­er­at­ing at a rated ca­pac­ity of 150 megawatts.

The power com­pany’s com­pos­ite av­er­age price per kilo­watthour in­creased by 5.2% to P4.44 from P4.22, par­tially off­set­ting the 41% de­cline in sales vol­ume as a re­sult of the con­tin­ued shut­down of SLPGC’s first unit un­til the end of the quar­ter.

SCPC’s core in­come dropped 64% to P804 mil­lion from P2.22 bil­lion in the same pe­riod last year. SLPGC’s core profit regis­tered a 76.9% de­crease to P582 mil­lion from P2.52 bil­lion.

Net of elim­i­na­tions, coal, SCPC and SLPGC con­trib­uted P4.71 bil­lion, P3.07 bil­lion and P1.16 bil­lion, re­spec­tively, for the nine months to Septem­ber.

On Thurs­day, shares in SMPC fell 10.03% to close at P26 each. —

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