DMCI Holdings 2016 core profit flat at P12.1 billion

March 17, 2017

Diversified engineering conglomerate DMCI Holdings, Inc. recorded flat core net income growth in 2016 at P12.1 billion from P12.3 billion the previous year 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 Consunji in a disclosure to the Philippine Stock Exchange on Friday. Integrated energy company Semirara Mining and Power Corp.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’s earnings before interest, taxes, depreciation and amortization grew three percent year-on-year from P14.3 billion to P13.8 billion due to higher billed volume (4%) and a 2 percent increase in average effective tariff. Construction company D.M. Consunji, Inc. earned P938 million or 49 percent more than P628 million the previous year. The strong performance of its construction segments accounted for the upturn, the firm said. Off-grid supplier DMCI Power Corp. 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 15.6 megawatt bunker-fired plant in Oriental Mindoro accounted for the growth. 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. The Department of Environment and Natural Resources ordered suspension of Berong Nickel Corp. in June 2016 because of alleged discoloration of Barangay Berong’s river system and tributaries. The following month, Zambales Diversified Metals Corporation was served a suspension order due to alleged “social issues”. Including a one-time gain of P530 million for the sale of its 25.11 percent share in Private Infra Dev Corp. (PIDC) in 2015 and a one-time gain of P111 million on the partial sale of Subic Water in 2016, the consolidated net income of DMCI Holdings slipped 5 percent from P12.8 billion in 2015 to P12.2 billion the following year. DMS