Railway project expanded DMCI order book in Q1
MANILA -D.M. Consunji, Inc. (DMCI), one of the leading construction companies in the country, reported signs of demand recovery in the first quarter even as the overall environment remained challenging for builders.
DMCI’s order book rose by 20 percent quarter-over-quarter to P42.4 billion from P35.2 billion, with the awarding of the South Commuter Railway Project (Contract Package 02) to the DMCI-Acciona Construction Philippines joint venture.
The order book represents potential revenues that DMCI, a key subsidiary of publicly listed Consunji family-led conglomerate DMCI Holdings, could recognize in its books in two to three years as construction commitments are delivered.
Costing over P28 billion, Contract Package 02 involves the construction of railway tracks and stations along España, Sta. Mesa and Paco, and will take roughly four and a half years to complete.
“DMCI’s participation in the joint venture is around 35 percent. In addition to construction revenues, we also expect to generate collateral business for our ready-mix concrete, equipment rental and steel fabrication units,” said DMCI president and CEO Jorge Consunji.
But compared with the same period last year, DMCI’s order book declined by 9 percent from P46.7 billion owing to the completion of several projects and the “descoping” or downsizing of North South Commuter Rail (NSCR) Contract Package 01, a joint venture with Taisei Corp. of Japan.
Current obstructions prevented access, possession and handover of the NSCR construction site, resulting in the exclusion of work valued at P7 billion from the project pipeline. Due to contentious right of way issues, the government has shelved those specific subsegments until such time that it could rebid and properly award them.
“We’re expecting equitable compensation for the descoping, which is a standard contract condition in construction projects. Negotiations are underway, and a resolution should be reached in the next few months,” added Consunji.
Aside from South Commuter Railway Contract Package 02, other projects in the DMCI order book include Dinapigue Causeway expansion, Xavier Junior High School Building, YCO Manila site early works and dredging of the lagoon in the La Mesa Water Treatment plant.
For the first quarter, DMCI reported a standalone net income of P263 million, a 26-percent drop from P355 million last year because of lower construction accomplishment and fewer projects in the pipeline.
Private construction activities remain sluggish as high interest rates dampened property developers’ interest to build new malls and offices. At the same time, the exodus of Philippine offshore gaming operators has weighed on property rental activities. INQ