SMPC reduces capex to P1.9B amid coal contract uncertainty

SEMIRARA MINING and Power Corp. (SMPC) has trimmed its capital expenditure (capex) budget to P1.9 billion this year, down 68% from last year, as it deferred investments in its coal segment pending the bidding for its coal operating contract.

In a disclosure last week, the company said it expects capex to reach P1.9 billion, lower than the P5.9 billion budget in 2025.

The reduced spending reflects “the absence of major equipment re-fleeting, as management deferred certain investments in the coal segment pending the results of the bidding for the coal operating contract,” SMPC said.

For its coal business, SMPC allocated P0.7 billion for information and communications technology (ICT) investments in network and infrastructure, maintenance of its power plant generator in Semirara Island, and mobile equipment support.

The company also expects power segment capex to reach about P1.1 billion, earmarked for plant maintenance, assurance spares, and ICT-related investments to support operational reliability.

“Management continues to exercise capital management to preserve financial flexibility,” SMPC said.

SMPC is the country’s largest coal producer, accounting for 97% of domestic output. However, operations at its main asset on Semirara Island in Antique face uncertainty as its coal operating contract is set for auction this year after failing to secure renewal.

The Department of Energy said the deadline for the submission and opening of bid documents, originally set for April 28, has been postponed “until further notice.”

For the first quarter of 2026, SMPC reported a 12% decline in net income to P3.8 billion, driven by weaker power output and lower coal shipments.

Revenues fell 7% to P15.43 billion from P16.51 billion, as electricity sales and exported coal volumes declined. — Sheldeen Joy Talavera