Semirara “unlikely” to return to pre-pandemic profit in 2021

Profits of Consunji-led Semirara Mining and Power Corporation (SMPC) are unlikely to return to pre-pandemic levels this year even though its coal business is expected to do well, according to its top officials.

During its virtual annual stockholders meeting on Monday, SMPC Chairman Isidro Consunji said given their operational headwinds and until the country achieves herd immunity, the integrated mining and power firm is not likely to return to pre-pandemic status anytime soon. 

Nonetheless, SMPC still expects some performance improvements as the coal and electricity markets begin to recover from the economic effects of the COVID-19 pandemic.

SMPC President and COO Maria Cristina Gotianun said the company has been implementing remedial measures since December to steadily normalize production at the Molave North Block 7 (NB7) in Semirara Island, Antique. Production is expected to hit 13 million metric tons (MMT) annually.

Meanwhile, the firm expects uneven results from its power generation businesses, namely Sem-Calaca Power Corp. (SCPC) and Southwest Luzon Power Generation Corp. (SLPGC). 

Gotianun said the goal for this year is to secure bilateral contracts for around 70% of total capacity by 2022. 

She added that SLPGC is seen to experience a strong profit recovery due to high plant availability and better spot market prices. SLPGC owns a 300 megawatt (MW) coal plant in Calaca, Batangas.

However, SCPC is seen to deliver disappointing results because of the forced outage of its Unit 2 due to a damaged generator, which started in December last year, Gotianun said. 

SCPC operates a 600-megawatt coal-fired power plant in Batangas, which the Consunji Group acquired from the government in 2009.

Earlier, SMPC allotted around Php4 billion in its capital expenditure program this year to fund mining and support equipment for its coal businesses.

SMPC’s coal and power businesses staggered from low demand and weak prices, wherein coal sales declined by 16% to 13.1 MMT in 2020.

Last year, the firm’s businesses experienced major setbacks due to the pandemic and China’s import quotas. It’s earnings dropped by 66% to Php3.3 billion due to lower revenues, which also fell by 36.2% to Php23.2 billion last year.