DMCI core profit plunges 21% to P18.8B
The earnings of engineering conglomerate DMCI Holdings Inc. dropped by 21 percent last year to P19 billion as weak prices of commodities and electricity prices, as well as feeble results in construction and real estate, offset gains in its utility and nickel businesses.
The Consunji-led group disclosed to the stock exchange on Friday that its core net income, which excludes nonrecurring items, also plunged by 21 percent to P18.8 billion.
“While some of our key businesses continue to face headwinds, our diversified portfolio helped mitigate the impact of challenging market conditions,” DMCI chair and president Isidro Consunji said in a statement.
Despite a “stable” power segment, integrated energy subsidiary Semirara Mining and Power Corp.’s bottom line dropped by 30 percent to P11 billion on weaker coal earnings.
Real estate under DMCI Homes booked a 35-percent fall in its earnings to P2.5 billion as weak demand pulled down real estate revenues, reflecting the sector’s overall weakness.
This was exacerbated by higher operating expenses, the conglomerate said.
Reduced shipments in the fourth quarter and increased capital spending weighed down the earnings of DMCI Mining Corp. by 62 percent to P246 million.
Capital expenditures surged by 656 percent to P310 million in the October to December period alone due to expansion activities.
Energy, water
DMCI Power Corp., the off-grid energy business, recorded a 29-percent surge in earnings to P1.24 billion on higher energy sales.
Maynilad Water Services Inc. likewise helped cushion the impact of the other business units’ weakness as its net income ballooned by 59 percent to P3.31 billion. This was driven by higher billed volume and increased average tariff.
DMCI owns Maynilad jointly with Manuel Pangilinan-led Metro Pacific Investments Corp. and Japanese conglomerate Marubeni Corp.
At the same time, earnings of Cemex Holdings Philippines Inc., in which DMCI acquired a majority stake last December, saw its net loss inflate by 4,141 percent to P19.51 billion due to a goodwill revaluation of P19.6 billion.
The revaluation reflects the difference between the purchase price—in this case, $272 million—and the fair value of Cemex’s assets and liabilities. This is often determined by third-party entities.
Total revenues also declined by 5 percent to P1.1 billion on lower cement prices amid a still-challenging environment for manufacturers.
Cemex CEO Herbert Consunji previously told reporters that it could take around three years for the company to recoup its financial losses as DMCI sought ways to improve operational efficiency.
