DMCI ended ’17 with profit 16% up
Consunji-led engineering conglomerate DMCI Holdings grew its net profit last year by 16 percent to P14.8 billion on higher earnings from its coal energy, real estate, construction and nickel mining businesses.
This performance translated to a return on equity of 20 percent, maintaining the previous year’s level. DMCI was also able to meet its double-digit growth goal despite what the firm described as a “challenging year.”
“For 2018, our financial performance will likely be more modest because of tapering electricity rates and the unresolved issues in our nickel mining and water businesses. But we see strong growth from our coal production and real estate segments,” DMCI chair and president Isidro Consunji said.
In a press briefing on Thursday night, Consunji said the real estate business would likely continue to do “extremely well” this year while the construction business would also likely benefit from the government’s infrastructure building activities especially with the tax reform program already in place. The government needs incremental revenues from the tax reform package to fund its “Build, Build, Build” promise.
For the fourth quarter of 2017 alone, DMCI’s net profit rose by 9 percent year-on-year to P3.1 billion on the back of P22 billion revenues, which rose by 5 percent. For the full year, DMCI’s revenues expanded by 18 percent to P81 billion.
Among operating units, the biggest contributor to DMCI’s net profit last year was Semirara Mining and Power Corp. with a share of 54 percent, followed by the real estate business under DMCI Homes with 24 percent and share of earnings from Maynilad Water Services Inc. at 11 percent.
Excluding a one-time gain of P111 million from the sale of its 10-percent stake in Subic Water and Sewerage Co. in 2016, core net profit rose by 17 percent to P14.8 billion last year.
Net income contribution from Semirara grew by 15 percent last year to P8 billion due to the 20-percent increase in average coal prices and the 21-percent jump in gross electric output.
DMCI Homes posted a 47-percent increase in net earnings contribution to P3.6 billion from restated earnings of P2.4 billion in 2016. The property developer’s financial results in 2016 were restated to reflect the shift in accounting policies in the real estate industry.
DMCI Homes posted P41 billion in sales last year, exceeding its budget of P26 billion, indicating a sustained revenue growth in the years ahead.
The construction business under D.M. Consunji Inc. also grew earnings contribution by 11 percent to slightly over P1 billion on lower operating costs, favorable settlement of pending claims and earlier-than-expected completion of some minor projects.
DMCI Mining Corp. returned to profitability last year, earning P113 million compared to a net loss of P65 million in 2016. This turnaround was attributed to a significant drop in operating costs alongside the shipment of 525,000 metric tons of nickel ore from its old inventory.
On the other hand, off-grid energy business DMCI Power Corp. ended the year with a 15-percent decline in net profit contribution to P359 million, due primarily to the expiration of the income tax holiday of its Masbate operations.
DMCI’s share of earnings from Maynilad also dropped by 12 percent to P1.6 billion due to the delayed implementation of its tariff adjustment alongside a higher base the previous year, during which the water utility posted a one-time gain from the review of its deferred tax liability.
