DMCI Holdings profit slips 31% to P1.85 B in 1st qtr

MANILA, Philippines - Consunji-led DMCI Holdings Inc. said its first-quarter profit sank by a third, weighed down by lower income contribution from its coal, nickel and construction businesses.

In a regulatory filing, DMCI Holdings said its core earnings slipped 31 percent to P1.85 billion in the first quarter from P2.67 billion a year ago.

“Real estate and power segments continue to report very strong growths but significant drops in coal, nickel and general construction brought down core net income for the period,” DMCI Holdings said.

However, its consolidated net income almost quadrupled to P10.21 billion from P2.67 billion a year ago, boosted by a one-time gain as it unloaded some shares in a water distributor.

In February, Japan’s Marubeni Corp. acquired a 20-percent stake in West Zone concessionaire Maynilad Water Services Inc. It brought down DMCI’s share in Maynilad to 25.24 percent from 40.98 percent, with partner Metro Pacific Investments Corp. also unloading a portion of its Maynilad shares to secure funding for expansion projects.

In terms of ongoing businesses, top income contributor to DMCI Holdings were power generation (P686 million), followed by real estate (P636 million) and water utility (P539 million).

Specifically, income from the power generation business jumped 72 percent to P686 million as subsidiary Sem-Calaca Power Corp. sold 770 gigawatt-hours of electricity, up 57 percent compared with a year ago.

“This is attributed to the higher energy generation of the power plant resulting from the completion of its rehabilitation,” DMCI Holdings said.

The real estate segment, through DMCI Project Developers Inc., posted a 57-percent income growth to P636 million “on the back of a strong 26-percent increase in recognized revenues year-on-year,” DMCI Holdings said.

Revenues, which are recognized when residential units are fully completed, reached P2.2 billion in the first quarter from P1.7 billion last year.

However, the water distribution business reported a 12-percent drop in earnings contribution to P539 million due to the lower stake in Maynilad.

“Continued expansion into the southern areas of Muntinlupa, Las Piñas and Cavite brought connections up to a total of 1.08 million billed services, a 6.9-percent growth from the end of the same period last year,” Maynilad said.

The construction business’ income contribution sank 70 percent to P84 million due to lower margins realized from the recently completed and ongoing building projects.

“Although delayed, the company is confident that the infrastructure development programs of the current Philippine government through the public-private partnership projects will inevitably materialize,” DMCI Holdings said.

For its part, DMCI Mining Corp. reported a net income of only P2 million, way below the P269 million a year ago “due to lower volume, ore grade and price compared to last year,” the company said.

Nickel ore shipments for the first quarter slipped to 189,000 wet metric tons (WMT) from 655,000 WMT while average sales price declined to $35 per WMT from $23 per WMT.

Subsidiary Semirara Mining Corp. incurred an P85-million net loss, reversing the P650-million income a year ago.

On Feb. 13, a section of the Panian pit west wall gave way, prompting Semirara to stop its commercial operations until March 6.

DMCI Holdings said it was adversely affected by the 24-percent cut in global coal prices to P2,182 per MT.

DMCI Holdings also has a minority stake in the San Miguel Corp.-controlled Private Infrastructure Development Corp., the firm that will build the P18-billion, 88-kilometer Tarlac-Pangasinan-La Union Expressway.