Cashflow Analysis

SMPC has consistently shown positive operating cash flow in the past decade. Q3 2021 net
operating cash flow of PHP16.7B is comparative to its pre-pandemic net operating cash flow in
the same period (Q3 2019), indicating a strong rebound from pandemic losses. This is backed by
the increase in revenue by Q3 2021 due to surge in coal prices and increase in coal demand 1.
From years 2017-2019, there is an annual increase in cash used for investing activities. These
are mainly driven by capital expenditure for the three-year Life Extension Program of Sem-
Calaca Power Corp to boost its generation capacity and extend economic life to 25 years. This
rehabilitation and plant improvements ended in 2019 and the total cost amounted to about
PHP 10 billion2. The decrease in capex around 2020 and 2021 is also driven by their prudent
practices amid pandemic struggles. For year 2020, the company postponed PHP3.7B of its
capital expenditures to 2021 and earmarked around PHP 4 billion capex for this year. Bulk of
capex are used to purchase mining equipment, re-fleeting, and water seepage management.

SMPC CAPEX
14000
12000 11645
10000 9539
8000
6324
6000 5488
4000 3607
2000
0
12M  Dec-2017 12M  Dec-2018 12M Dec-2019 12M Dec-2020 9M Sep-2021

Aside from the regular dividends of PHP1.25 per share last March 25, 2021, the company also
delared PHP 1.75 special dividends on October 12, 2021. Thus in year end, dividend payout will
amount to PHP 12.7 billion, their highest dividend payout in years. Financing cash flow in Q3
2021 also largely affected by a debt issuance and debt payment of PHP5.3B and PHP9.4B,
respectively. Overall, Q3 2021 shows a positive net cash flow with negative investing and
financing activities, which are indications of a mature company, greatly offset by the substantial
operating cash flow. Negative investing cash flow shows that the company is investing in assets
that could help its future growth, and negative financing cash flow implies that the company
are able to reward its shareholders and pay its own debt at the same time. The company also
showed good recovery of their free cash flow, which is an indication of how profitable the
company is.

1
According to SMPC, strong demand and price surge in coal was due to China’s ban on Australian coal.
2
http://www.semiraramining.com/news/content/News_Articles/139