DMCI Q1 profit up 5% to P4.3B

Consunji-led conglomerate DMCI Holdings saw a 5-percent year-on-year growth in first quarter net profit to P4.3 billion on higher earnings from coal mining, water and construction businesses.

DMCI’s three-month consolidated revenue grew by 8 percent year-on-year to P20.3 billion, the company said in a disclosure to the Philippine Stock Exchange.

“Our power generation business suffered some setbacks this quarter because of the unplanned outages of Sem-Calaca Power Corp. and Southwest Luzon Power Generation Corp.,” said DMCI Holdings chair and president Isidro Consunji.

“But we believe that higher coal sales and average selling prices will more than offset the impact of these outages on our bottomline,” he said.

Coal mining and power generation unit Semirara Mining and Power Corp. posted a P4.6-billion net profit in the first quarter, mostly due to the 24-percent increase in the average selling price of coal. As such, Semirara’s three-month net income contribution to DMCI rose by 3 percent year-on-year to P2.6 billion.

Share of earnings from water concessionaire Maynilad Water Services also jumped by 12 percent year-on-year to P315 million in the first quarter. This was driven by a 4.9-percent rise in billed volume and the 2.8-percent inflationary rate adjustment on its basic charge beginning Jan. 1.

Construction arm D.M. Consunji Inc. likewise grew its net income contribution by 85 percent year-on-year to P336 million, due to the realization of variation orders from projects nearing completion.

Variation order refers to changes in the original contract, such as in the form of addition, substitution or omission from the original scope of works.

Meanwhile, nickel mining arm DMCI Mining grew earnings contribution by 41 percent year-on-year to P45 million due to the shipment of higher-grade nickel from its old stockpile. Lower depreciation cost also shored up its bottomline.

DMCI’s first quarter earnings were tempered by the decline in contribution from its real estate and off-grid energy businesses.

Net income share from DMCI Homes declined by 11 percent year-on-year to P848 million due to a slowdown in revenue recognition from its residential development projects. Following the percentage of completion accounting method, DMCI books revenues based on the progress of its project development and once at least 15 percent of the contract price has been collected from the buyer.

Also, off-grid energy unit DMCI Power saw a 12-percent drop in earnings contribution to P76 million mainly due to lower-than-expected provisional tariff granted to its Aborlan power plant in Palawan. The company has a pending motion for recomputation with the Energy Regulatory Commission.