MANILA -DMCI Holdings – the Consunji family’s energy, mining, water and property conglomerate – is betting on more inflation-proof upscale residential projects as cancellations pulled down real estate earnings at middle-market focused DMCI Homes during the first quarter of 2023.
DMCI chair and president Isidro Consunji said high interest rates and hybrid work also started to “temper” demand for their property business while elevated building material costs continued to erode margins.
A major income contributor for the group, DMCI Homes earnings fell 22 percent to P1.1 billion during the first quarter of the year on lower building construction revenues and higher sales cancellations.
Consunji said they were planning to introduce more high-end projects to counter the slowdown as well as “new product formats” such as leisure and premium developments.
“We are developing high and lower end formats so we will start expanding the market coverage of DMCI Homes, which we hope will offset some of the negative effects of high interest rates and inflation,” Consunji said during the company’s annual stockholders’ meeting on Wednesday.
DMCI’s overall net income during the first quarter fell 32 percent to P7.6 billion partly due to lower commodity prices, whose rally the past year helped push up DMCI’s profits to a historic high in 2022.
The company’s portfolio includes Semirara Mining and Power, Maynilad Water Services, DMCI Homes and construction company D.M. Consunji.
Consunji said on Wednesday overall growth would be “muted” in 2023 due to “price volatility, cost inflation, high interest rates, and the lingering impacts of the pandemic”.
However, he noted that power and water were bright spots for 2023 due to strong consumption and higher prices.
DMCI will also implement cost-controls and explore less capital intensive joint ventures to protect margins.
“I remain optimistic about our ability to adapt and persevere,” Consunji said.
“Our diverse portfolio, sound financial position, and commitment to operational excellence give us a strong foundation to navigate the volatile business environment and continue delivering value,” he added.