DMCI Holdings posts 20% profit drop in 2023

MANILA, Philippines — Engineering conglomerate DMCI Holdings Inc. incurred a 20 percent drop in its profit in 2023 as business took a beating from price corrections in energy and nickel prices.

In a local stock filing, DMCI Holdings said its net income fell to P24.9 billion in 2023 from P31.1 billion in 2022, due to slowdowns in its energy, nickel and construction subsidiaries.

DMCI Holdings chairman and president Isidro Consunji said the company was expected to suffer a larger decline, but managed to prevent such a scenario by ramping up production and sales.

Revenue plunged by 14 percent to P122.8 billion in 2023 from P142.6 billion in 2022, as the market started to correct the prices of coal, nickel and power. DMCI Holdings also saw an overall pullback in construction activities with fewer projects waiting to be completed.

Newcastle and Indonesian Coal 4 Index prices shrank by 64 percent and 26 percent, respectively, while nickel rates in the Philippines went down by 30 percent. Further, the average effective spot settlement price dropped by 18 percent, snapping a two-year increase.

“We saw sharp corrections in commodity and energy prices, but because our businesses did very well in terms of the production and sales volume, we managed to prevent a severe decline in our profitability,” Consunji said.

By subsidiary, Semirara Mining and Power Corp. (SMPC) contributed the lion’s share of profits, accounting for 63 percent.

In spite of this, SMPC posted a 30 percent decline in net income contribution to P15.8 billion in 2023 from P22.7 billion in 2022 as prices of coal and electricity decreased.

Similarly, DMCI Mining’s profit share fell by almost half to P655 million from P1.3 billion, on lower nickel values and higher logistics costs. D.M. Consunji Inc., the construction arm, realized a two percent dip to P573 million, as it completed fewer projects compared to 2022.

Meanwhile, DMCI Homes raised its net income contribution by two percent to P4.6 billion, benefiting from the recovery of shelter prices. DMCI Holdings also increased by 40 percent its profit take from Maynilad Water Services to P2.1 billion due to better production and higher tariff.

DMCI Holdings maintains a 25.24 percent share in the water concessionaire assigned in the west zone of the Greater Manila Area.

Lastly, DMCI Power expanded its profit contribution by 29 percent to P959 million, attributed to the growth in gross generation and electricity dispatch.