SMPC posts record-high P25.8-B profit in H1

INTEGRATED energy company Semirara Mining and Power Corp.’s (SMPC) net income more than quadrupled to P25.8 billion in the first six months of 2022, its highest earnings for any given semester.

The company’s first semester net income compares to P6.3 billion recorded in January-June last year.

In the second quarter alone, SMPC booked a net income of P10.8 billion, a 171-percent increase from P4 billion posted in the same period in 2021.

The energy company attributed the jump on its earnings to all-time high coal selling prices coupled with higher spot electricity sales volume at elevated prices.

Contributions from SMPC’s coal segment went up by 195 percent to P9 billion from P3 billion while SEM-Calaca Power Corp. accounted for P1 billion, up 81 percent from P581 million. Southwest Luzon Power Generation Corp. contributed P742 million, a 107-percent increase from P359 million.

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Total shipments in the second quarter, however, dropped by 24 percent to 3.7 million metric tons (MMT) from 4.9 MMT as China-imposed Covid-19 lockdowns and shifted to Russian coal.

During the period, export sales fell by 44 percent to 1.8 MMT from 3.2 MMT while domestic sales grew by 12 percent to 1.9 MMT from 1.7 MMT.

The 126-percent increase in average selling prices to P5,399 from P2,393, the highest for any given quarter, offset the lower shipments.

Heavy rainfall and higher stripping activities curbed coal production that reached 3.4 MMT, a 21-percent drop from 4.3 MMT. This, together with lower sales volume, raised high-grade coal inventory by 50 percent from 1.0 MMT to 1.5 MMT.

Overall gross generation in the second quarter was mostly flat at 984 gigawatt-hour (GWh) as SCPC Unit 2 remained on forced outage because of a defective generator stator.

Total electricity sales declined by 9 percent from 987 GWh to 900 GWh, most (56 percent) of which was sold to the spot market. The rest (393 GWh) was sold through bilateral contracts.

High uncontracted capacity allowed SMPC to boost spot electricity sales by 188 percent from 176 GWh to 507 GWh. Average spot selling prices remained elevated at P6.91 as compared to P6.87 in 2021.

Total spot purchases declined by 60 percent from P617 million to P245 million on higher plant availability, which improved by 8 percent from 65 percent to 60 percent.

“As expected, we had a weaker performance quarter over quarter because of the China lockdowns but compared to last year, we did very well,” said Maria Cristina Gotianun, SMPC president and chief operating officer.

“We maintain our view that the second semester will be anemic because of market volatility and unfavorable weather conditions,” she added.