Consunji-led engineering conglomerate DMCI Holdings saw a 2-percent decline in nine-month net profit to P11.5 billion, as earnings from its integrated coal mining and power generation business were curbed by an unplanned power plant outage and heavy rains.
But the bulk of business recovery claims—related to the operation of its power plant units that was disrupted for seven months—are expected to be collected this fourth quarter amounting to around P1 billion, giving DMCI optimism that the profit decline could be offset before yearend.
“Aside from Semirara, our construction, real estate and nickel mining businesses also slowed down in the third quarter. But we still expect single-digit growth in our full-year results,” DMCI Holdings chair and president Isidro Consunji said in a press statement.
For the first nine months, net income contribution from Semirara Mining and Power Corp. dropped by 22 percent year-on-year to P5.1 billion due to the prolonged shutdown of Southwest Luzon Power Generation Corp. (Unit 1) alongside reduced coal production on Semirara Island because of continuous rains in July and August and higher strip ratio or waste material that must be moved in order to reach the mineral ore.
Semirara expects to collect around P1 billion out of the business disruption insurance coverage of its power plant.
Once all of the claims are recognized this fourth quarter, the group’s earnings are expected to reverse the contraction seen in the first nine months.
Excluding a P715-million one-time gain on sale of an undeveloped lot by DMCI Homes and P66 million refinancing and other one-time costs of Maynilad, DMCI’s core net income from January to September contracted by 8 percent year-on-year to P10.8 billion.
For the third quarter alone, DMCI Holdings recorded a 44-percent year-on-year decline in net income to P2.3 billion.