Semirara Mining and Power (SCC) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income and EPS declined 41% year-over-year to Php 6.05 bn and Php 1.42/share, respectively, as energy markets normalized.

• H1 2024 net income dropped 34% year-over-year to Php 12.59 bn, with EPS at Php 2.96/share and return on equity at 21%, mainly due to stabilizing coal and electricity prices and higher coal production costs, partially offset by record coal shipments and power generation.

• The group declared and paid Php 14.9 bn in cash dividends in April 2024.

• Coal segment contributed 52% of Q2 earnings, with power segment's share rising to 48%.

• Best-ever H1 coal production (10.2 MMT) and shipments (9.4 MMT) cushioned the impact of lower coal prices.

Financial highlights

• Q2 2024 consolidated revenues fell 24% year-over-year to Php 18.2 bn; H1 2024 revenues down 18% to Php 36.6 bn, driven by lower selling prices for coal and power.

• Q2 EBITDA margin at 46%, net margin at 33%; H1 net income margin narrowed to 34% from 43% last year.

• Cost of sales increased 11% to Php 17.2 bn due to higher coal production costs and sales volume.

• Q2 coal contributions plunged 54% to Php 3.14 bn; power contributions down 12% to Php 2.91 bn.

• Maintained net cash position of Php 9.34 bn after Php 20.23 bn outflow for dividends, capex, and debt payments.

Outlook and guidance

• Energy market expected to remain steady short-term, driven by Asian restocking, domestic demand, and production efficiency.

• FY2024 coal production guidance at 15.5–16 MMT, strip ratio revised to 12.3 due to shift to single-mine operations.

• Power segment targeting additional contracted capacity and managing planned outages for H2.

• 2024 capex budget revised down to Php 6.4 bn, still 68% higher than 2023 actual, with 73% allocated to coal segment.

• Management focus on marketing and operational efficiencies amid stabilizing energy markets.