DMCI sets P70-B capex to shore up profitability

Engineering conglomerate DMCI Holdings Inc. will spend around P70 billion this year to support the operations of its businesses, particularly energy and water, in hopes of improving profitability after a challenging 2024.

The amount, which DMCI chief financial officer Herbert Consunji confirmed to reporters on Wednesday, is 45 percent higher than DMCI’s total capital expenditure (capex) of P48.3 billion last year.

According to Consunji, their budget for the year includes the P41.2-billion capital spending of Maynilad Water Services Inc., in which DMCI holds a 27-percent stake.

The amount will be used for sewerage service expansion and improvement of services. The concessionaire is expected to make its stock market debut, valued for as much as P49 billion, in July ahead of its deadline with the national government.

As for other business units, developer DMCI Homes will get P17.9 billion from the budget pie for construction and land banking.

To recall, the real estate giant’s earnings fell by 35 percent last year to P2.5 billion as weak demand pulled down revenues, reflecting the sector’s weakness.

Consunji said they expected DMCI Homes’ earnings to be better this year as they expect demand to gradually improve.

Integrated energy firm Semirara Mining and Power Corp., meanwhile, will get P6.4 billion to support coal mine exploration and maintenance activities.

Semirara remained DMCI’s main net income contributor last year, although weaker coal earnings resulted in a 30-percent decline in its net income to P11 billion.

DMCI Power Corp., which operates the conglomerate’s off-grid energy business, will get P1.6 billion mainly for pipeline capacity expansion. It currently has 159.8 megawatts in installed capacity.

See Also

More PH mining opportunities pitched

On the other hand, DMCI Mining Corp. will earmark P500 million for mining exploration.

New plant

Cemex Holdings Philippines Inc., which DMCI took over last year for $272 million, will set aside P1.9 billion for equipment upgrades.

The country’s fourth largest cement manufacturer is in the process of completing its Solid Cement Corp. expansion plant. This is expected to boost Cemex’s capacity to 7.2 million tons from 5.7 million tons.

DMCI’s earnings in 2024 dipped by 21 percent to P19 billion as weak commodities, electricity prices and real estate offset gains in its utility businesses.

Core income, which excludes nonrecurring items, slipped by 21 percent to P18.8 billion.