DMCI income fell 11% in January-September on weak contribution of coal miner

By VG Cabuag- November 14, 2019

https://businessmirror.com.ph/2019/11/14/dmci-income-fell-11-in-january-september-on-weak-contribution-of-coal-miner/

CONSUNJI-LED DMCI Holdings Inc. said its net income fell 11 percent during the nine months of the year ending September to P9.3 billion from last year’s P10.4 billion, a decline still blamed on the weak contribution of its coal mining and power unit Semirara Mining and Power Corp.

For the third quarter alone, the company, however, booked a 47-percent jump in net income to P2.8 billion from P1.9 billion last year, mainly attributable to the normalized coal operations of Semirara Mining compared to 2018 when heavy rains in July and August caused a production slowdown.

Excluding a nonrecurring loss of P164 million in 2018 due to the share in accelerated depreciation of Units 1 and 2 of Sem-Calaca Power Corp. and a one-time gain of P248 million this year mostly from the share in insurance proceeds received by Southwest Luzon Power Generation Corp., DMCI recorded a 24-percent increase in third-quarter core earnings to P2.6 billion from P2.1 billion last year.

“We had a strong third quarter but we still expect negative growth for the full year because of the scheduled shutdown of Calaca Units 1 and 2, low coal prices and lower construction accomplishments in our real-estate business,” DMCI Chairman and President Isidro A. Consunji said.

For the nine months, core net income contributions from Semirara Mining dropped 14 percent year-on-year to P4.7 billion from P5.4 billion following a 17-percent decline in power generation and a 22-percent drop in coal prices.

DMCI Homes contributed P1.8 billion in core income, flat compared to last year due to the lower percentage of completion in ongoing projects.

Core net income contributions from affiliate Maynilad Water Services Inc. grew 6 percent to P1.6 billion from P1.5 billion owing to a 2-percent growth in billed volume, a 5.7-percent inflation rate adjustment and a 2.7-percent increase in basic charge.

Net income contributions from construction arm DM Consunji Inc. declined by 30 percent to P664 million from P952 million as a result of right-of-way acquisition delays and the absence of variation orders realized from projects nearing completion.

Off-grid energy unit DMCI Power Corp. contributed P341 million, also almost flat from P337 million last year, due to the combined effect of lower electricity dispatch in favor of hydropower plants in Oriental Mindoro during the third quarter and the expiration of the company’s supply contract in Sultan Kudarat last December 2018.

DMCI Mining, which is mainly into nickel operations, recorded a 35-percent decline in net income contributions to P87 million from P133 million as the company shipped more lower-grade nickel at lower average selling price.

Contributions from DMCI Holdings and other investments during the nine months grew 8 percent to P185 million from P171 million due to higher interest income.