DMCI Holdings sees 20% growth in recurring profit

Business mirror

THURSDAY, 19 MAY 2011 19:46 MIGUEL R. CAMUS / REPORTER

DMCI Holdings Inc. expects recurring profit to grow by at least 20 percent this year after reporting strong first quarter results, during which most of its businesses posted higher earnings, offsetting a slowdown in its construction unit, a top official said on Thursday.

In 2010, DMCI saw its net income jump 67 percent to P7.89 billion, buoyed by the gain from the sale of steel manufacturing unit Atlantic Gulf & Pacific Company of Manila Inc. in December. Removing that gain, profit would still be above the P7 billion the company forecast earlier.

“Net income [in 2011] will be 20-percent above last year, excluding non-recurring [gains],” DMCI president Isidro Consunji said in a text message on Thursday.

“All businesses should do 20-percent growth or more [while] construction will be the same as last year,” he added.  

DMCI said in its first quarter report that profit increased 61 percent to P2.27 billion as revenues rose by almost a tenth to P10.81 billion. The bulk of the earnings this year were contributed by unit Semirara Mining Corp., which is involved in coal mining and power generation, and by Maynilad Water Services Inc., which provides water to the west zone concession area of Metro Manila.

Semirara, a 56-percent owned unit, contributed P739 million and P262 million from its coal mining and power interests, respectively, due to higher coal prices and improved sales of its Calaca coal-fired plant. These results are definitely higher compared with P312 million and P57 million posted during the same period last year.

Maynilad, which DMCI operates with Metro Pacific Investments Corp., saw its contribution grow by 27 percent to P498 million on increased efficiencies and higher sales.

DMCI’s construction unit, D.M. Consunji Inc., saw net income decline of 7 percent to P362 million, coming from both a higher base in 2010 and the absence of new projects during the first quarter.

DMCI finance officer Aldric Borlaza said in a phone interview that the construction unit is expected to post flat or lower growth for the rest of 2011, despite recently bagging almost P10 billion worth of new projects.

These include P8.6 billion to complete a casino-hotel project of businessman Enrique Razon Jr. and the remainder for residential and office buildings, which typically command lower margins versus infrastructure projects, Borlaza noted.

He added that the company’s projections do not include new projects under the Aquino administration’s public private partnership program.  

DMCI’s real estate unit, DMCI Project Developers Inc., saw its first quarter contribution grow more than a third to P224 million, on strong sales from its middle-income housing units sold under the brand name DMCI Homes. 

Real estate sales grew 52 percent to P1.1 billion while pre-sales during the period rose 41 percent to P5.4 billion.

DMCI shares added 0.35 percent to P42.90 each on Thursday, giving it a market value of P113.93 billion.