Analysis on Semirara Mining Corporation for the Year 2010-2011

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TABLE OF CONTENTS:

EXECUTIVE SUMMARY: ...................................................................................... 3

COMPANY INTRODUCTION: ................................................................................ 4

CONSOLIDATED FINANCIAL STATEMENTS …………………………………………………………. 11
December 31, 2011 and 2010 and Years Ended December 31, 2011, 2010
And 2009 and Independent Auditors’ Report
ANALYSIS OF FINANCIAL STATEMENT
BALANCE SHEET DECEMBER 31, 2010 AND 2011: ……………………………….. 49
BALANCE SHEET DECEMBER 31, 2011 AND 2010
HORIZONTAL ANALYSIS: ............................................................... 50 VERTICAL ANALYSIS: ................................................................... 51
INCOME STATEMENT DECEMBER 31 2010 AND 2011: …………………………. 52
HORIZONTAL ANALYSIS: .............................................................. 53 VERTICAL ANALYSIS: .................................................………………….. 54 FINANCIAL ANALYSIS:

HORIZONTAL ANALYSIS: ………………………………………………………………………. 55
VERTICAL ANALYSIS: ……………………………………………………………………….….... 59
FINANCIAL RATIOS: ……………………………………………………………………………… 60

CONCLUSION: …………………………………………………………………………………………………. 64

RECOMMENDATION: ………………………………………………………………………………………. 65

APPENDIX: ……………………………………………………………………………………………………… 66 COMPUTATIONS OF FINANCIAL RATIOS

EXECUTIVE SUMMARY

The attached report analyzes the financial position of Semirara Mining Corporation. Semirara Mining Corporation is a publicly-listed mining company and a subsidiary of the DMCI Holdings, Inc. The company is engage in the business of coal mining and coal production. As of now, Semirara Mining Corporation is the only large-scale coal producer in the Philippines and is engaged in surface open cut mining of thermal coal from its Panian mine on Semirara Island, in the Antique Province. The company is publicly traded on the Philippines Stock Exchange (PSE).

The company’s competitors are composed mainly of suppliers of imported coal. More than 90% of the total coal production in the county is produced by the company.

This report summarizes Semirara Mining Corporation’s financial position from 2010 to 2011. The company increased its sales from 2010 to 2011. High coal prices and increase in energy sales resulted to a 13% growth in the consolidated Revenues in 2011 and 2010. Net earnings registered an outstanding growth of 51% from consolidated net income after tax in 2010. Earnings per share posted a 40% growth in 2011. Conversely, the current ratio dropped by 16% from 2010 to 2011. On the contrary, the Debt-to-Equity ratio improved by 4%.

In summary, the company’s strategic and efficient management of resources as well as consistent efforts to improve its present operation ensured a healthy cash generation in 2011.

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COMPANY INTRODUCTION:

COMPANY HISTORY:
On 11 July 1977, the Government through its former Energy Development Board, now the Department of Energy (DOE), awarded a 35-year coal operating contract to a consortium formed by three private companies. On incorporation of the Company, these companies subscribed equally to the Shares and, in exchange for the Shares, they assigned the Coal Operating Contract to the Company, which was then known as Semirara Coal Corporation. As a result of their financial difficulties, two of the three initial shareholders transferred their Shares, which had been provided as security for loans from Government financial institutions, to the National Development Corporation (NDC) after the lenders had foreclosed on the loans. In order to obtain control of the Company, NDC bought the Shares of the third initial shareholder to obtain a 95% interest in the Company. The Coal Operating Contract, which was amended by an agreement dated 8 June 1983, gives the Company the exclusive right to conduct exploration, development and coal mining operations on Semirara Island until 2012....
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