DMCI Holdings Books PhP6.7B in H1
Diversified engineering conglomerate DMCI Holdings, Inc. (PSE: DMC) booked PhP6.7 billion in consolidated income for the first half of 2019, a 22 percent decline from PhP8.6 billion the previous year.
The earnings slowdown was due to the weak contributions of Semirara Mining and Power Corporation (SMPC), D.M. Consunji, Inc. (DMCI) and DMCI Mining.
For the second quarter alone, DMCI Holdings posted PhP3.8 billion in net income, down 20 percent year-on-year from PhP4.7 billion.
Excluding non-recurring items, core net income in the second quarter slipped 6 percent to PhP4 billion from PhP4.2 billion, raising core net income from January to June to PhP6.9 billion, a 17 percent year-on-year drop from PhP8.3 billion.
“We had a tough first-half because of lower average selling price of coal, higher replacement power costs, provisions for project cost overruns and lower average price for our lower grade nickel,” explained DMCI Holdings Chairman and President Isidro A. Consunji.
“But we hope to curb the profit decline in the succeeding quarters,” he added.
Net income contributions from SMPC dropped 26 percent from PhP4.6 billion to PhP3.4 billion owing to a 213 percent upturn in replacement power costs from PhP742 million to PhP2.3 billion and lower average selling price of coal, which contracted 18 percent from PhP2,710/metric ton (MT) to PhP2,227/MT.
Excluding the share in one-time loss of PhP334 million for the accelerated depreciation of Calaca units 1 and 2 in 2018 and the net effect of the share in non-recurring items in 2019, namely, the accelerated depreciation of Calaca Units 1 and 2 (PhP187 million); one time-loss on a financial contract of Southwest Luzon Power Generation Corporation (PhP156 million); and one-time income of PhP102 million for the Commission on Audit-approved money claim of Sem-Calaca Power Corporation against the Power Sector Assets and Liabilities Management Corporation, core net income contributions from SMPC fell 26 percent from PhP4.9 billion to PhP3.6 billion.
DMCI Homes recorded a 36 percent drop in net earnings contribution from PhP1.8 billion to PhP1.2 billion due mainly to the absence of one-time gain from the sale of land in 2018.
Excluding a one-time gain of PhP715 million on sale of land, core net income contributions from DMCI Homes improved 5 percent year-on-year from PhP1.1 billion to PhP1.2 billion because of lower project development cost.
Income share from DMCI declined 35 percent from PhP676 million to PhP440 million due to provisions for cost overruns.
Off-grid energy supplier DMCI Power contributed PhP233 million, a 9 percent improvement from PhP214 million last year. Higher energy sales to power cooperatives in Masbate, Palawan and Oriental Mindoro accounted for the growth.
Attributable net income from DMCI Mining slipped 22 percent from PhP221 million to PhP173 million as the company shipped more lower-grade nickel at lower average selling price.
Net income contributions from affiliate Maynilad grew 16 percent from PhP950 million to PhP1.1 billion owing to the combined effect of billed volume and tariff increases.
Excluding share in a one-time loss of PhP70 million due to refinancing costs, Maynilad core net income contributions rose 9 percent from PhP1 billion to PhP1.1 billion.
Other income during the first half surged 43 percent from PhP88 million to PhP126 million because of higher interest income.
