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SEMIRARA Mining Corp., the country’s largest coal
producer, said its profits slumped last year as demand for coal
dipped even as costs rose.
In a report to the Securities and
Exchange Commission (SEC), Semirara said its gross profit decreased
by 57 percent to P974.53 million year on year.
Last year’s coal sales
dropped by 16 percent to P4.59 billion due to competition from the
natural gas-fired plants and the entry of cheaper imports. The
company’s coal sales volume stood at 2.076 million metric tons, or
16 percent lower than the previous year’s level.
The company also attributed
the lower sales to the drop in the demand for cement, an industry
that accounts for 26 percent of its total sales.
Despite the “bleak
picture of the power and cement markets”, sales to industrial
users of Semirara coal increased by 56 percent to 48.94 thousand
metric tons, the company said.
”Although the total
volume may not be impressive, it is noteworthy that towards the end
of the year, the company started to deliver to small industrial and
manufacturing plants who were shifting to coal from more expensive
fuels like bunker and diesel,” Semirara said.
The company said this
development is in line with the company’s thrust of
reducing dependence on a few major customers and penetrating the
nontradi-tional coal users.
Semirara said more volume
was delivered to the Calaca plants of the National Power Corp. (Napocor),
which accounts for 62 percent of the total coal delivered, driving
coal handling revenues to rise by 11 percent to P96.34 million.
Even with higher
coal-handling revenues, Semirara’s gross revenues last year was 16
percent lower at P4.69 billion since 98 percent of company’s
revenues depend on coal sales while only 2 percent came from coal
handling.
Cost of sales rose by 12 percent
to P3.71 billion as advanced stripping increased the cost of coal
sold by 36 percent at P1,754.82 per metric ton. Operating expenses
went down by 51 percent to P133.13 million as the reduced coal sales
brought down the government’s share by 13 percent to P271.64
million. General and administrative expenses dropped by 105 percent
due to the reversal of the provision of real property taxes provided
under Presidential Decree 972 that exempted Semirara from all but
the income tax.
 --Likha
C. Cuevas
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