DMCI sees flat 2014 on power business loss

Business World Online
Posted on August 05, 2014 10:31:00 PM

THE CONSUNJI group’s holding company said it is expecting full-year profit to be little changed, with its performance weighed down by expected losses in its power business and lower margins from its construction subsidiary.

In a phone interview yesterday, DMCI Holdings, Inc. President Isidro A. Consunji said the company is expecting “between P9-10 billion” in core profit for 2014, slightly lower than the P10.6 billion the conglomerate reported the previous year.

“It’s a mixed bag. Okay naman ’yung coal, okay ’yung nickel, okay ’yung Maynilad, pero mahina ’yung power dahil sira, I think lugi ’yung power,” he added, citing the rehabilitation of DMCI Power Corp.’s Calaca Plant Unit 2 in Batangas City.

DMCI holds an interest in coal through Semirara Mining Corp., a 56% owned subsidiary engaged in the exploration, mining and development of coal resources on Semirara Island in Caluya, Antique. It is the country’s largest coal-producing company with a “guaranteed long-term market” through its supply contract with the state-run National Power Corp.

Its nickel operations, on the other hand, are handled by DMCI Mining Corp., a wholly owned subsidiary with operations in Sta. Cruz and Candelaria, Zambales. It has a contract mining arrangement with Benguet Mining Corp. in Zambales, and runs an open-pit nickel, chromite, and iron laterite mine.

Through its affiliate DMCI-MPIC Water Company, Inc., the conglomerate currently has a 25.24% stake in Maynilad Water Service, Inc.

Mr. Consunji noted that the revenue contribution of its construction business, under subsidiaries D.M. Consunji, Inc. and DMCI Project Developers, Inc., will be “a bit lower than 2013” due to weaker margins.

In the first quarter, net profit dropped to P3.48 billion from P10.65 billion a year earlier, while gross revenue fell to P14.19 billion from P22.03 billion.

Costs and expenses fell to P10.33 billion from P11.06 billion.

On Tuesday, shares in DMCI gained P1.10 or 1.46% to close at P76.50. -- Daphne J. Magturo source