Semirara Mining & Power Corp unit outage adds to disappointment

Semirara Mining & Power Corporation (SCC) disclosed that Unit 1 of its subsidiary Southwest Luzon Power Generation Corporation (SLPGC) is extending its unplanned outage. The outage initially occurred last June 17, 2023.

In the first quarter of 2023, SLPGC net of intercompany eliminations delivered a net income of 632 million, more than double last year’s result of 307 million.

As of March 31, 2023, nearly half (143.70 MW) of the 300 MW dependable capacity is contracted with no fuel pass-through provision in place. Net of capacity allocated for station service, which is at 30MW, SLPGC has 126.3MW of capacity exposed to the spot market.

Since half of the capacity has been contracted, SLPGC will have to procure replacement power at spot market prices. This will probably turn SLPGC into a net buyer in the spot market. This will again shrink the margins of SLPGC.

The outage will not materially affect the fortunes of SCC but it will add to the disappointment of the market against SCC. SCC has not been meeting the expectations of the market. Net income in the first quarter of 2023 was down to 9 Billion from 15 Billion in 2022. The market has been expecting the coal surge of 2022 to continue.

SCC is trading near its 52-week low of 26.59 It is down 23.56% from a year ago. With this additional disappointment, it will probably make a new 52-week low.

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