DMCI nets P12.2B

Diversified engineering conglomerate DMCI Holdings Inc. booked a core net income of P12.1 billion last year, down by 1.6 percent from the previous year, due to lower contributions from its real estate, nickel mining and water businesses.

Including one-off items, the consolidated net income of DMCI Holdings slipped by 5 percent to P12.2 billion from P12.8 billion in the previous year. Non-recurring items included a one-time gain of P530 million for the sale of its 25.11 percent share in Private Infra Dev Corp. (PIDC) in 2015 and a one-time gain of P111 million on the partial sale of Subic Water in 2016.

“The double digit growth of our energy and construction businesses were offset by the sharp drop in profitability of DMCI Homes, DMCI Mining and Maynilad,” DMCI Holdings chair and president Isidro Consunji said in a press statement on Friday.

Integrated coal mining and energy company Semirara Mining and Power Corp. (SMPC) posted an all-time-high consolidated net income of P12 billion in 2016 due to higher coal and power sales. This resulted in a 43 percent year-on-year improvement in income contribution to DMCI Holdings to P6.9 billion.

Net income contributions from DMCI Homes and Maynilad fell 46 percent and 19 percent, respectively. Both firms contributed P1.9 billion in equity earnings for the year.

The deferred recognition of revenues from its completed high-rise projects curbed the earnings of DMCI Homes while the expiration of Maynilad’s income tax holiday in December 2015 gnawed on the water utility’s profitability last year.

However, 2016 sales and reservation numbers of DMCI Homes hit a historic high of 8,236 units, a 55 percent increase from the previous year.

For its part, Maynilad’s cash flow grew by 3 percent to P13.8 billion. This was attributed to a 4 percent increase in billed volume and a 2 percent increase in average effective tariff.

Meanwhile, construction arm D.M. Consunji Inc. made a strong comeback in 2016, earning P938 million or 49 percent more than level in the previous year. The strong performance of its construction segments accounted for the turnaround.

Off-grid supplier DMCI Power Corp. saw an 11 percent increase in earnings contribution to P424 million. Higher electricity sales in Masbate and Palawan, coupled with the full-year operations of its 15.6-megawatt bunker-fired plant in Oriental Mindoro accounted for the growth.

The suspension of DMCI Mining’s nickel assets – combined with receding nickel prices and sluggish demand for lower-grade nickel – led to a 113 percent decline in its profitability. From a full-year net income of P501 million in 2015, it posted a full-year net loss of P65 million in 2016.

The Department of Environment and Natural Resources ordered the suspension of Berong Nickel Corporation in June because of the alleged discoloration of Barangay Berong’s river system and tributaries. The following month, Zambales Diversified Metals Corporation was served a suspension order due to alleged “social issues.”