Semirara Mining and Power Corp. said net profit in 2016 may reach around P10 billion from P8.45 billion in 2016 with the full commercial operations of the 300-megawatt expansion of the Calaca coal-fired power plant.
Semirara Mining president and chief operating officer Victor Consunji told reporters after the stockholders’ meeting that “if all remain equal,” the company could register the higher income this year.
“That’s the way we’re thinking because if we did P8.5 billion, and assuming we can control the costs. But prices are still falling, so it’s hard to speculate,” Consunji said.
Semirara Mining posted a record net income of P8.45 billion in 2015, up 24 percent from 2014 despite a 13-percent drop in revenues to P24.68 billion due to low coal prices.
Consunji said the newly-completed 300-MW coal plant expansion in Batangas was expected to contribute P2 billion to the company’s profitability this year.
“Assuming things are equal, P2 billion [in additional profit] but sometimes that is not the reality. Sometimes market moves. Our competitor, which is Indonesia, keeps reducing the price. They’re dumping coal to Philippines,” He said.
Consunji said “notwithstanding the difficulties in 2015 and the failure of the 2x 150 MW plants to contribute to the net earnings of our company,” Semirara Mining still achieved a 25-percent growth in profit from P6.86 billion in the previous year.
The 300-MW power plant expansion secured 222 MW of supply contracts or 84 percent of the rated capacity.
Consunji, meanwhile, is optimistic on the outlook on coal demand as growth will be driven by the commissioning of new power plants and the expansion of cement plants.
But the oversupply of coal from Indonesia and Russia and the growing support from environment groups to reduce coal in power generation were pushing spot prices at low levels, he said.
Semirara Mining’s coal production reached 7.98 million tons in 2015, a slight decline from 8.08 million tons in 2014 due to the temporary suspension of operations for nearly a month from July 17, 2015 due to a mining accident.
Semirara Mining owns the country’s biggest coal mining operations in Antique province.
Consunji said the company was spending around $50 million to $60 million this year for the coal mining segment and around P2 billion for power generation mostly, for rehabilitation.
“For power plants, it’s basically rehabilitation because we’re banking on the operational side, if we can put on all the enhancement or improvement,” he said.
He said the company was looking at increasing the power generation capacity of the existing 600-MW Calaca plant which the company acquired from the government.
“Like unit 1, there is a possibility we can increase power generation by about 50 MW, from 200 MW to 250 MW, by redoing the boiler so we can put in more fuel and generate more power,” Consunji said.
Semirara Mining is also keen on the new 700-MW expansion in joint venture with Meralco PowerGen Corp. and Marubeni Corp. of Japan.