DMCI on track to hit P10-B profit goal

Philippine Daily Inquirer
1:27 am | Wednesday, August 6th, 2014

Consunji-led DMCI Holdings sees core earnings reaching P10 billion this year, replicating last year’s level at the very least, on a mixed bag of performance results from various subsidiaries.
This year’s outlook factors in the reduced equity stake in Maynilad Water Services Inc., a decline in earnings from power due to rehabilitation work in the first half and slower contribution from construction due to stiff competition and delays in the awarding of big-ticket infrastructure projects, DMCI president Isidro Consunji told reporters after the company’s annual stockholders’ meeting Tuesday.
However, DMCI sees a much better year for coal mining this year versus last year alongside higher contribution from real estate and the newly acquired nickel mining businesses, he said.
Based on first-semester results, DMCI is on track to meet its core earnings goal of P10 billion, said DMCI chief finance officer Herbert Consunji.
By earnings contribution, DMCI is expecting to generate P2.3 billion from its share in Semirara Mining’s coal business and another P1.6 billion from its power business this year. Last year, coal mining contributed P1 billion while the power business pumped in P3.5 billion.
From the water business, DMCI expects to book equity earnings of P2 billion out of Maynilad Water Services Inc.’s likely earnings of P8 billion this year. DMCI pared down its stake in Maynilad from 41 percent to 25 percent but projected earnings would still be slightly better than last year’s contribution of P1.9 billion as the pie is seen to increase.
The construction business is seen to contribute P700 million this year, lower than last year’s P1.3 billion. Once more big-ticket projects are awarded, the contribution of this segment will likely rebound by next year, according to the DMCI president.
The real estate business is expected to contribute P2.8 billion to P3 billion, about 15-percent higher than the level a year ago.
Meanwhile, the newest business segment—nickel mining—is seen to contribute around P500 million this year from only P169 million last year.
DMCI Mining expects to ship out 1.7 million tons of nickel ore this year, much more than the 800,000 tons in 2013. The Palawan mine alone is expected to contribute a million tons of shipment this year, seen doubling to two million tons next year.
“Last year was very bad (for nickel mining). This year is very good. Next year is not so good. Much of it depends on Indonesia—whose ban on export of nickel ore has jacked up prices of nickel,” Isidro Consunji said. Doris C. Dumlao source