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DMCI net profit hits P5.78 B in H1

By Zinnia B. Dela Peña (The Philippine Star) Updated August 20, 2012 12:00 AM

Manila, Philippines -  Consunji-led DMCI Holdings, Inc. saw its first half net profit rise nine percent to P5.78 billion on the back of higher real estate sales and construction revenues.

In a financial report submitted to the Philippine Stock Exchange (PSE), DMCI said consolidated revenues went up by 4.81 percent to P27.47 billion with coal sales accounting for the lion’s share with P9.42 billion.

The coal mining business suffered 12 percent drop in contribution to total revenues due to lower coal prices. Nickel ore sales dipped by 13.6 percent to P1.52 billion.

Semirara Mining Corp. the country’s largest coal producer, reported a 20.7 percent drop in income in the first semester due to the decline in its coal and power revenues.

The power segment, coming mainly from the Calaca power units, also dropped in contributions due to the reduced capacity coming from the rehabilitation of its unit 1.

The construction business under D.M. Consunji posted better operations, pumping in P601 million to the group’s total earnings, up 23.7 percent year-on-year. The growth was due mainly to billable works done for the building projects. Significant accomplishments in the Entertainment City and the Raffles Hotel provided most of the boost in revenues.

Construction activity from the Tarlac-Pangasinan-LaUnion Expressway (TPLEX) also helped contribute notable revenues for DMCI.

Moving forward, newly awarded power plant-civil works projects in Calaca and Balayan, Batangas are also expected to contribute not just construction revenues but higher margins as well.

DMCI’s orderbook as of June 2012 reached P17 billion. The bulk of the balance of work is coming from the Entertainment City and the power plant contracts in Batangas. However, the orderbook does not include the MRT-7 railway project, which was conditionally awarded to DMCI upon financial closing.

The housing segment under the brand DMCI Homes logged a 38 percent increase in net contributions from P845 million last year to P1.2 billion. Revenues grew 40 percent to P4.5 billion due to the completion of sold units in the Cedar Crest project in Taguig City.

Reservation sales, on the other hand, declined six percent to P9.4 billion. The group hopes to at least reach the same levels of full year sales and reservations in 2011 as it launches new projects in the second half.

Most of the group’s housing units have a selling price around P3 million per unit. With the current increase of VAT-free housing price threshold to around P3.3 million, the company has leveraged on the tax advantage to become more competitive in terms of price in the market.

DMCI said its water business through Maynilad Water Services Inc., continued to post better results with net earnings rising 22 percent to P3.3 billion due to improved operating efficiencies.

The group owns 44.59 percent of the consortium company which in turn owns 91.9 percent of the west zone concessionaire.
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