Consunji-led engineering conglomerate DMCI Holdings Inc. saw a 6-percent year-on-year drop in nine-month net profit to P9.2 billion due to weak profit contributions from real estate, nickel mining and water businesses.
Excluding a one-time gain of P111 million from the sale of a small stake in Subic Water and Sewerage Co., DMCI’s core net income slipped by 2 percent year-on-year to P9.1 billion during the same January to September period.
Consolidated revenues were flat at P45.1 billion compared to P45.6 billion last year.
“Our earnings results are in line with our forecast. Although our construction and energy businesses did well, the revenue recognition timing issue of DMCI Homes and the income tax holiday expiration of Maynilad (Water Services) significantly weighed down our consolidated results,” DMCI chair and president Isidro Consunji said in a press statement on Friday.
“The suspension of DMCI Mining’s two operating units also accounted for our sluggish earnings,” Consunji added.
Net income contributions from Semirara Mining and Power Corp. surged by 52 percent year-on-year to P5.4 billion, attributed to higher coal export sales and the commercial operations of Southwest Luzon Power Generation Corp.
Construction arm D.M. Consunji Inc., on the other hand, more than doubled its net income to P732 million from P361 million last year. The 103-percent year-on-year growth was primarily related to the full recognition of cost overruns for a power plant in 2015.
Off-grid energy unit DMCI Power Corp. booked a 12-percent profit increase to P342 million for the nine-month period as a result of higher sales to electricity cooperatives in Calapan, Masbate and Palawan.
Property development arm DMCI Homes, on the other hand, saw a 63 percent year-on-year drop in nine-month net income to P1 billion due to the deferred recognition of revenues from its completed high-rise projects, which normally take three to four years to complete. Contrary to local industry practice, the mid-range property developer regonizes sales as revenues only when the unit is fully completed and at least 15 percent of the contract price has been collected.
Depressed nickel prices and the prolonged suspension of its mining units in Palawan and Zambales resulted in a 91-percent drop in profitability for DMCI Mining Corp. to P59 million.
Net income contributions from affiliate Maynilad dropped by 11 percent to P1.5 billion. A 4-percent increase in billed volume, a 3 percent increase in average effective tariff and a non-recurring consolidated adjustment of P1 billion due to availment of the optional standard deduction cushioned the impact of its income tax holiday expiration in 2015.
DMCI Holdings and other investments income also dropped by 6 percent to P58 million from a year ago due to reduced interest in Subic Water. From 40 percent, the group was left with a 30-percent interest after divesting its 10 percent stake in March this year.