DMCI reports 43% drop in 2014 net income

The Consunji family’s DMCI Holdings Inc. said profit in 2014 dipped on weaker earning contributions from its core power and construction businesses, a stock exchange filing on Monday showed.

DMCI Holdings said core net income was down 3 percent to P10.26 billion from the level in the same period in 2013. Its net income, which includes nonrecurring items, was down 43.1 percent to P10.78 billion due to the absence of a P519-million one-time gain from the business combination accounting for ENK Plc and Toledo Mining Corp., the filing showed.

DMCI Holdings said 2014 revenues increased by 1 percent to P56.56 billion, while downplaying the profit decline.

“The resilience of our engineering diversification strategy was apparent in 2014. Despite the weaker-than-expected results of two business segments, we were able to stabilize the overall profitability of our investment portfolio,” DMCI Holdings president Isidro Consunji said in the filing.

As noted, lower contributions from the power business and contractor D.M. Consunji Inc. dragged down earnings and offset gains from its mining, property development and water supply businesses.

It said net income contributions from power dropped by 42 percent to P2 billion. Technical problems and commissioning delays forced the extended outage of Power Unit 2 of SEM-Calaca Power Corp., which exposed the company to high Wholesale Electricity Spot Market (WESM) prices for its replacement power during the first half of 2014.

In the meantime, earnings from its construction subsidiary D.M. Consunji Inc. were dragged down by cost overruns in its engineering, procurement, and construction (EPC) contract for a power plant, and the delayed implementation of major public infrastructure projects due to right-of-way and utility relocation issues.

Net income contributions from construction dropped 62 percent to P479 million, DMCI Holdings said.

By contrast, its mining businesses rebounded from last year’s drop and showed “significant growth in net income contributions due to the combined effect of higher sales volume and better average prices.”

In particular, Semirara Mining and Power posted a 125-percent increase from P1 billion in 2013 to P2.3 billion the following year. Net income contributions from DMCI Mining Corp. rose 114 percent to P362 million.

Real estate subsidiary DMCI Homes continued to deliver growth, with a 22-percent increase in net income, mostly coming from gains realized from the sale of lots. Its net income contribution hit P3.2 billion last year, up 18.5 percent, the filing showed.

Continued improvement in the operational performance of affiliate Maynilad Water Services Inc. pushed its net earnings share from the water business higher by 6 percent to P2 billion, DMCI Holdings said.