Consunji’s Semirara saw operating cash flow fall 40% in 2025 as shareholders await the usual March–April dividend

 

A coal-and-power cash machine is still throwing off money. Just not quite as extravagantly as before.

There is a difference in business between earning less and feeling poorer. Semirara Mining and Power Corporation, the Philippines’ coal baron with captive power plants strapped to its side, managed both in 2025. Reported net income fell to about ₱13.1bn, down a third from the year before. More tellingly, operating cash flow slid to roughly ₱16.4bn from ₱27.5bn—a drop of about 40%. In a company whose investment case has long rested on fat, frequent cash distributions, that is the number that stings. Profits flatter; cash pays dividends. 

That distinction matters because Semirara is not merely a cyclical resource stock. It has become, in the minds of many local investors, a sort of irregular annuity: a company that pays in spring, and often surprises again in autumn. In 2025, it still declared dividends of ₱13.8bn, lower than the ₱25.5bn distributed in 2024 but still generous. Yet the composition of the year was less comfortable than the payout made it appear. The parent company’s own operating cash flow appears to have dropped to about ₱8.4bn, well below the ₱13.8bn it declared in dividends. The difference can be bridged by retained earnings, cash on hand, and upstreamed subsidiary dividends. It is nonetheless a reminder that 2025’s payouts were supported less by fresh gush and more by plumbing.

Why did the gush weaken? First came the obvious culprit: price normalization. The coal segment’s average selling price fell 19% to ₱2,302 per tonne, while benchmark coal prices also retreated, with the Newcastle Index down 22% and ICI4 down 15% in 2025. The power arm looked busier but no richer: total electricity sales rose to a record 5,296 GWh, yet the segment’s overall average selling price fell 8%, with spot prices down 23%. That is how one ends up with a paradoxical year—record coal production and record power sales, but sharply lower cash generation. Volumes were sturdy; monetization was not.

Then came the subtler squeeze of working capital, the corporate equivalent of money getting stuck in the pipes. Consolidated inventories swelled to around ₱17.3bn from ₱12.0bn, as coal and fuel stockpiles rose sharply. Total coal inventory jumped to 5.0m tonnes from 0.9m, suggesting that production outran shipments. Payables, meanwhile, fell to about ₱8.7bn from ₱10.9bn, meaning Semirara was allowing fewer supplier obligations to finance the business. Receivables did decline, which released some cash. But that relief was outweighed by the cash absorbed in stockpiles and by the reduction in payables. In commodity businesses, inventory can be tomorrow’s blessing. In cash-flow statements, it is today’s headache.

That is why dividends, not just earnings, now command the market’s nervous attention. Semirara’s recent rhythm has been unusually generous. In March 2025, the board approved a ₱1.25 regular dividend and a ₱0.75 special dividend, both paid in April 2025; in October 2025, it declared another ₱1.25 special dividend for November payment. The pattern was similar in 2024 and 2023: a spring distribution, then an October encore. As of mid-April 2026, however, dividend trackers showed no 2026 dividend declaration yet, and recent PSE disclosure feeds did not show a new cash-dividend filing. That does not prove a cut. But it does deny investors the soothing reassurance of a familiar calendar. 

The trends that may weigh most on future dividends are therefore not hard to identify. Start with the simplest: earnings have been falling for two years, and cash flow has fallen faster still. Add softer coal prices, which remain far below the bonanza conditions that funded the blockbuster payouts of 2023 and 2024. Add softer spot power prices, with management itself expecting WESM prices in 2026 to remain subdued as fresh renewable and baseload capacity enter the grid. Add a ₱347m loss from the cement associate, Concreat Holdings Philippines, which turned what might have been a nuisance into a drag. And add the regulatory overhang of the DOE’s competitive bid round for the continuation of Semirara coal operations. None of those trends guarantees stinginess. Together, they suggest a future in which special dividends are harder to justify as routine. 

Yet panic would be excessive. For all the deterioration in cash generation, Semirara remains financially sturdy. Loans payable fell 62% to roughly ₱997m by end-2025. The current ratio improved to 3.04, from 2.35 a year earlier. The group’s 2026 capex budget is expected to fall sharply to about ₱1.9bn, down from ₱5.9bn in 2025, which should ease some of the pressure on free cash flow. Operationally, the picture is not one of decay but of capacity. Coal production hit a record 19.9m tonnes. Power generation and sales also reached records. Contracted power capacity increased to 362.9 MW, making earnings somewhat less hostage to the whims of the spot market. A company with a weak balance sheet and shrinking assets would invite alarm. Semirara has, instead, a weaker cash year layered onto a still-strong franchise.

Investors, then, should resist two temptations. The first is nostalgia: the temptation to assume that because Semirara once paid extraordinary dividends, it must continue to do so on command. Those distributions were products of an extraordinary commodity cycle. The second is melodrama: the temptation to interpret a missing spring declaration as a verdict on the company’s health. Dividend timing can slip; boards can choose to wait for clarity on prices, cash balances or regulatory matters. What matters more is whether the business can still convert tonnes and kilowatt-hours into enough cash to preserve the broad outline of the payout story. On that score, Semirara’s position has weakened—but not broken. 

The likeliest outcome is neither feast nor famine. Semirara may remain a dividend payer of consequence, just no longer a vending machine for specials. If coal prices stabilize above pre-pandemic norms, if inventories are monetized, and if lower capex restores breathing room, investors may yet receive a respectable income stream. But the days when the market could treat every March as a ceremony and every October as an encore are, for now, less assured. In commodity businesses, the first thing to vanish is often exuberance. The second, if one is unlucky, is cash. Semirara has so far lost only the first half of that pair.

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Disclaimer: This is for informational purposes and is not investment advice. Figures are taken from company disclosures and exchange data; valuation ratios include the author’s calculations based on cited inputs.