DMCI Holdings Reports Flat Q1 Profit

Makati—(PHStocks)—Diversified engineering conglomerate DMCI Holdings Inc. (PSE: DMC) recorded flat earnings at PhP3 billion in the first three months of 2016. This includes the PhP111 million one-time gain on partial sale of its 10% share in Subic Water and Sewerage Co.

Excluding this non-recurring item, core net income stood at PhP2.93 billion, a 4% dip from PhP3.06 billion last year.

“We expect a weak bottom line this year because of a confluence of factors. Declining commodity prices, tapering electricity rates, and most of all, the termination of Maynilad’s six-year tax exemption will drag down net income contributions from our businesses,” said DMCI Holdings Chairman and President Isidro A. Consunji.

Pulled down

Reduced profitability of its two major income contributors accounted for the flattish growth of the Consunji holding company.

From PhP845 million, net income contributions from DMCI Homes dropped 21% to PhP665 million due higher costs on materials and labor, paid commissions and documentary stamps from its bond issuance.

Meanwhile, Maynilad posted a 24% drop from PhP527 million to PhP403 million, following the expiration of its income tax holiday in December 2015.

Losses

Seasonality in the shipping window and lower shipment volume due to depressed nickel ore prices led to a wider loss for DMCI Mining Corp.

From a first quarter net loss of PhP24 million in 2015, the company’s bottom line further receded by 321% to PhP100 million during the same period this year.

Better performance

The power and construction businesses fared better during the first reporting period. Semirara Mining and Power Corp. (SMPC, PSE: SCC) contributed PhP1.6 billion, a 16% improvement from the PhP1.4 billion recorded in the first three months of 2015.

Off-grid supplier DMCI Power Corp. delivered PhP98 million, a 32% increase from PhP74 million last year. Higher electricity sales in Oriental Mindoro, Palawan and Masbate and the commercial operations of a 3×1.23 MW plant in Sultan Kudarat beginning January accounted for the income growth.

Despite a 12% drop in revenue, income contribution from D.M. Consunji Inc. rose 3% from PhP191 million to PhP197 million, as total construction costs fell at a faster pace. From PhP3.1 billion the previous year, first quarter total construction costs declined 14% to PhP2.7 billion.

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