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DMCI Holdings records slower growth in Q1

Posted on May 20, 2012 09:09:41 PM [ BusinessWorld Online ]

DMCI HOLDINGS, Inc., the conglomerate behind the Consunji family’s businesses, registered slower income growth in the first quarter as profit declines in its flagship coal and construction units eroded gains from its real estate, water, and power interests.

DMCI Holdings booked a net income of P2.67 billion for January to March, up 17.62% from P2.27 billion a year ago, a rate significantly slower than the 61% rise the company realized last year.

“Despite a slight dip in coal mining and general construction contributions, growth in the nickel mining segments along with the sustained improvement in the real estate, water and power segments caused the increase in the company’s bottom figure,” DMCI Holdings said.

Revenues, mostly from coal sales and construction contracts, rose by 20.35% to P13.01 billion, while cost of sales and services grew by 31.19% to P8.79 billion.

DMCI Holdings’ real estate business, DMCI Project Developers, Inc., posted the highest income increase, with its quarterly net income rising by 81% to P405 million.

This was brought about by a 51% uptick in housing sales to P1.7 billion due to the completion of earlier-sold units in Metro Manila.

Water utility Maynilad, Inc., the company’s joint-venture firm with Metro Pacific Investments Corp., saw its profits grow by 23% to P611 million as water operating efficiencies and billed volume reportedly improved in the period.

In addition, Maynilad’s share of non-water revenues fell to 45.43% from 51.58% last year, while billed services climbed by 11.4% to “a little above a million accounts” from the 918,000 accounts reported in the same period last year.

Metro Pacific Investments is the local unit of Hong Kong-based First Pacific Co. Ltd., a part owner of the Philippine Long Distance Telephone Co., Inc. (PLDT).

Mediaquest Holdings, Inc., a subsidiary of PLDT’s Beneficial Trust Fund, has a minority stake in BusinessWorld.

Nickel and metals miner DMCI Mining Corp. also saw its net income rise by 37% to P269 million on improved sales volumes despite flat quarter-on-quarter selling prices.

But the company’s coal mining and construction businesses posted weaker results for the first quarter due to higher expenses and tighter margins.

Listed coal miner Semirara Mining Corp., which also handles power generation, saw its coal operations earn P650 million in net income, down 12% from last year’s P739 million due to higher operating costs.

But its power generation unit hiked its net income 53% to P400 million versus P262 million last year due to reported operational improvements of its Calaca plant in Batangas province.

Construction, on the other hand similarly suffered, with D. M. Consunji, Inc. earning only P282 million this year, 22.10% down from P362 million last year, on the back of the lower margins of existing infrastructure projects versus infrastructure projects last year.

“[But] the company believes the infrastructure development programs of the current Philippine government will inevitably materialize. As such, the company, thru DMCI [Holdings], is very much interested in the construction of these initiatives. The company believes it is well positioned to be a driver and a beneficiary of the country’s infrastructure progress,” D. M. Consunji said. -- Franz Jonathan G. de la Fuente

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