Consunji-led Semirara Mining and Power Corp. is deferring capital expenditure (capex) projects worth P3.7 billion to next year as part of its strategy to stay afloat amid the impact of the global pandemic.
In its annual stockholders’ meeting held virtually on Friday, the listed coal mining and power firm said its business was “largely unaffected” by the government’s quarantine policies which have been in place since mid-March, though it bore the brunt of weak demand and slumping prices in the market.
“Our operations have been largely unaffected by the lockdown because of the nature of our business. However, like most companies, we are susceptible to weak demand and lower market prices,” Semirara Chairman Isidro A. Consunji said.
To remain stable and to meet its obligations, the company is delaying its capital expenditure to next year.
“Consistent with our disciplined and prudent approach in managing our company, we are rescheduling P3.7 billion worth of capex to 2021,” Mr. Consunji said.
“We will also defer hiring for non-corp[orate] positions, reduce non-essential business expenses, and dispose of non-core assets,” the company’s official added.
In the first quarter, Semirara posted a 43% drop in net income to P1.2 billion as its coal business saw declines in output and export sales.
The integrated energy firm reported that its coal output was down 22% to 3.2 million metric tons (MT) in the first three months of the year, compared to 4.1 million MT in the same period in 2019.
Its export sales also plunged by 20% to 1.6 million tons from last year’s 2 million tons, while domestic sales were almost unchanged at 1.6 million tons year-on-year.
Moreover, its average coal selling price went down by 16% to P1,900 per ton from P2,272/ton a year ago, mirroring the drop in global coal prices.
“Unfortunately, we do not see any significant movement in coal prices this year,” the company’s chairman said.
Meanwhile, the 300-megawatt second power plant unit of SEM-Calaca Power Corp. resumed operations in the first week of May after undergoing months of rehabilitation since October last year.
Semirara is engaged in coal mining and power generation and distribution. It is a unit of listed conglomerate DMCI Holdings, Inc.
On Friday, shares in Semirara inched up 0.47% to close at P12.70 each. — Adam J. Ang