DMCI reports signs of recovery

MANILA, Philippines — D.M. Consunji Inc. (DMCI), the infrastructure arm of Consunji-led DM Consunji Holdings Inc., reported signs of demand recovery in the first quarter of the year.

Its order book rose by 20 percent quarter-on-quarter from P35.2 billion to P42.4 billion.

The quarter-on-quarter increase was largely due to the awarding of the P28-billion South Commuter Railway Project (Contract Package 02), which is a joint venture with Acciona Construction Philippines.

The project involves the construction of railway tracks and stations along España, Sta. Mesa and Paco, and will take roughly four and a half years to complete, according to DMCI.

DMCI president and CEO Jorge Consunji said that from this particular project, the company expects to generate additional revenue from  the related businesses.

“DMCI’s participation in the joint venture is around 35 percent. In addition to construction revenues, we also expect to generate collateral business for our ready-mix concrete, equipment rental and steel fabrication units,” Consunji said.

On the other hand, DMCI’s order book declined by nine percent year-on-year from P46.7 billion in the same period last year.

This was due to the completion of several projects and descoping of the North South Commuter Rail (NSCR) Contract Package 01, a joint venture with Taisei Corp. of Japan.

Current obstructions such as right-of-way problems prevented access, possession, and handover of the NSCR construction site, which resulted in the exclusion of work valued at P7 billion from the project pipeline.

However, Consunji said they expect equitable compensation for the descoping, which is a standard contract condition in construction projects.

“Negotiations are underway, and a resolution should be reached in the next few months,” said Consunji.

Aside from South Commuter Railway Contract Package 02, other projects in the DMCI order book include Dinapigue Causeway expansion, Xavier Junior High School Building, YCO Manila site early works and dredging and hauling of lagoon in the La Mesa Water Treatment plant.

For the first quarter, DMCI reported a net income of P263 million, a decline of 26 percent because of lower construction accomplishment and fewer projects in the pipeline.