SMPC hit by low coal prices

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Semirara Mining and Power Corp. (SMPC)) said it remains cashflow positive despite the pandemic but it does not expect to perform better this year than in 2019.

“Our operations were largely unaffected by the lockdown because of the essential nature of our business. However, like most companies, we are susceptible to weak demand and lower market prices,” said Isidro Consunji, SMPC chairman and chief executive officer at the company’s stockholders meeting last Friday.

Consunji said he does not expect any significant movement in coal prices until the end of the year as the market will be highly dependent on the economic recovery from the disruptions caused by the new coronavirus disease 2019,

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“Given the market situation today and in the immediate future which is highly unpredictable, we don’t see the company perform better in financial terms,” Consunji said.

In 2019, the company recorded a 20 percent decline in its consolidated net income as it only reached P9.6 billion from the previous P12.1 billion attributed to lower contribution from one of its power generation projects and low coal prices.

SMPC said it can meet its government obligations and will manage to keep afloat.

The company said it has implemented measures to cushion the impact of the slowdown in business, including the rescheduling of P3.7 billion worth of capital expenditure to next year, deferment of hiring for non-core positions, reduction of non-essential business expenses and disposal of non-core assets.

“If needed, we also have available credit lines that we can tap,” Consunji said.

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