DMCI posts P12-B income, sets higher capex of P57 billion

Published March 17, 2017, 10:00 PM By James A. Loyola

http://business.mb.com.ph/2017/03/17/dmci-posts-p12-b-income-sets-higher-capex-of-p57-billion/

Diversified engineering conglomerate DMCI Holdings, Inc. reported that its core net income was almost flat at P12.1 billion last year from P12.3 billion in 2015 due to lower contributions from its real estate, nickel mining, and water businesses.

 “The double digit growth of our energy and construction businesses were offset by the sharp drop in profitability of DMCI Homes, DMCI Mining and Maynilad,” said DMCI Holdings Chairman and President Isidro A. Consunji in a media briefing.

Consunji said that the company will continue investing in the Philippines and has set a P56.98 billion capital expenditure budget for this year, a 42.5 percent jump from the P40 billion it allotted for 2016.

He said DMCI Homes will spend the lion’s share of P46.54 billion, followed by Semirara Mining and Power Corporation with P8.44 billion, construction unit DM Conunji, Inc. will get P570 million, DMCI Power will spend P1.33 billion, and P100 million for DMCI Mining.

Integrated energy company SMPC hit an all-time-high consolidated net income of P12 billion in 2016 due to higher coal and power sales. This resulted in a 43 percent year-on-year improvement in income contribution to DMCI Holdings, from P4.8 billion to P6.9 billion.

Net income contributions from DMCI Homes and Maynilad fell 46 percent and 19 percent, respectively. Both firms contributed P1.9 billion.

The deferred recognition of revenues from its completed high-rise projects led to the earnings slump of DMCI Homes while the expiration of Maynilad’s income tax holiday in December, 2015 pulled down the water company’s profitability.

However, 2016 sales and reservation numbers of DMCI Homes hit a historic high of 8,236 units, a 55 percent increase from 5,325 units the year before.

Meanwhile, Maynilad EBITDA grew 3 percent year-on-year from P14.3 billion to P13.8 billion due to higher billed volume (4 percent) and a 2 percent increase in average effective tariff.

Premiere construction company D.M. Consunji, Inc. made a strong comeback in 2016, earning P938 million or 49 percent more than P628 million the previous year. The strong performance of its construction segments accounted for the upturn.

Off-grid supplier DMCI Power Corporation continued to churn steady growth, netting an 11 percent increase from P382 million to P424 million. Higher electricity sales in Masbate and Palawan, coupled with the full-year operations of its 15.6MW bunker-fired plant in Oriental Mindoro accounted for the growth.

The suspensions of DMCI Mining’s nickel assets, combined with receding nickel prices and sluggish demand for lower-grade nickel, led to a 113 percent decline in its profitability. From a full-year net income of P501 million in 2015, it posted a full-year net loss of P65 million in 2016.