Semirara Mining and Power Corp. said Friday it is moving the bulk of its 2020 capital expenditure budget of P3.7 billion to 2021 amid the coronavirus pandemic.
“Consistent with our disciplined and prudent approach to managing our company, we are rescheduling P3.7 billion worth of capex to 2021,” SMPC chairman Isidro Consunji said during the first virtual stockholders’ meeting of the company.
The company is spending only about P300 million this year. SMPC last year completed its P10-billion life extension program for subsidiary Sem-Calaca Power Corp.
SMPC also completed its P2.9-billion South Panian mine rehabilitation program in Semirara Island.
Consunji said that while operations were unaffected by the community quarantines, the company was susceptible to weak demand and lower market prices.
He said 2020 would be “very difficult” but the Philippines could experience a “strong rebound” next year. He said a second wave of infections could derail economic recovery efforts.
“The challenge, therefore, is to keep our employees and finances healthy while we weather this pandemic-induced economic downturn,” Consunji said.
SMPC is also implementing other cash conservation measures such as deferment of hiring for non-core positions, reduction of nonessential business expenses and disposal of non-core assets.
“Implementing these measures will allow us to preserve and generate cash, which we intend to use to meet our stakeholder obligations,” he said.
Consunji said the company would pare down its debt through internally generated cash. As of March 31, SMPC owed P5 billion in short-term loans and P16 billion in long-term debt.
“If the pandemic and economy worsen, we can rely on our unused credit lines to tide us over,” he said.
Consunji said it would take some time before SMPC could return to the profit and dividend levels the company was used to “given the prevailing conditions and continuing risks presented by COVID-19.”
SMPC president Maria Cristina Gotianun said the company was well-positioned to weather the pandemic. SMPC owns the country’s largest coal mining operations in Antique.
“We have a healthy balance sheet and a wide range of measures to safeguard the long-term viability of our company…2020 will be a very difficult year for all of us. But we have laid a strong foundation, and with your steadfast cooperation, we can emerge from this pandemic even stronger,” Gotianun said.