SEMIRARA Mining and Power Corp. (SMPC), a subsidiary of DMCI Holdings, saw net income for the first half drop 34 percent to P12.59 billion, from P19.21 billion in the same period last year, amid higher production costs and lower selling prices of coal and electricity.

In a stock exchange filing on Friday, the company said that revenues in the first six months of 2024 also fell 18 percent to P36.59 billion from P44.57 billion.

"Despite our efforts to manage costs and improve operational efficiencies, the persistent decline in global coal and electricity prices has significantly impacted our financial performance," SMPC President and Chief Operating Officer Maria Cristina Gotianun said.

For the second quarter alone, SMPC's net income fell by more than half, to P3.73 billion from P7.94 billion last year, while stand-alone revenues shrank 32 percent to P12.81 billion on weaker selling prices despite a slight increase in shipments.

While total coal shipments for the quarter rose 2 percent to 4.6 million metric tons (MMT) from 4.5 MMT amid stronger domestic demand, the average selling price of Semirara coal dropped by a third to P2,780 per metric ton (MT), from P4,151/MT last year, as market indices stabilized and demand for noncommercial grade coal continued to grow.

Total coal output in the three months to June surged 73 percent to 5.2 million MT from 3.0 million MT due to the lower base effect created by the near depletion of its Molave mine last year and lower rainfall.

Meanwhile, the company's power business reported an 11-percent decline in second-quarter net income to P2.91 billion from P3.28 billion while its stand-alone revenues marginally rose 1 percent to P6.86 billion.

Overall plant availability slightly improved to 81 percent from 80 percent in the quarter to June, thanks to fewer outage days logged by Southwest Luzon Power Generation Corp. (SLPGC).

SMPC added that total gross generation for the second quarter improved 12 percent to 1,352 gigawatt-hours (GWh), from 1,212 GWh last year, due to higher SLPGC plant availability and average capacity along with the restored capacity of SEM-Calaca Power Corp.'s Unit 2.

Power sales in the second quarter went up by 12 percent to 1,228 GWh from 1,097 GWh on higher gross generation, with majority of the generated electricity sold to the spot market, and the remainder sold through bilateral contract quantities.

Looking ahead, SMPC expects coal prices to go down further in the second half of 2024 because of the onset of the monsoon season.

For the coal business, the company plans to strengthen its domestic market share and improve operational efficiency. For the power segment, it will focus on contracting half of its dependable capacity of 840 megawatts to minimize spot buy risks and enhance operational efficiency to reduce costs.

"The second half of the year should be more of the same for us in terms of coal prices. We also expect coal production, electricity demand and spot prices to taper because of the rainy season," Gotianun said.

Semirara shares fell by 50 centavos, or 1.48 percent, to P33.20 apiece on Friday, tracking a 1.32-percent drop for the benchmark Philippine Stock Exchange index.