MANILA, Philippines — Engineering and construction conglomerate DMCI Holdings Inc. of the Consunji family recorded a 25-percent drop in first-quarter earnings to P5.6 billion due to stabilizing commodity prices, slashing the income of nearly all its business units.
In a stock exchange filing on Wednesday, DMCI said revenues fell by 17 percent to P27.4 billion in the January to March period on lower coal, nickel, and electricity prices, as well as “lower construction accomplishments” and higher real estate sales cancellations.
“Market prices pose a significant challenge for us this year,” DMCI chair and president Isidro Consunji said in a statement. “We do not expect coal, nickel, and electricity prices to recover to the highs of the past two years due to shifts in demand-supply dynamics.”
On a per unit basis, earnings of Semirara Mining and Power Corp. dropped by 27 percent to P3.7 billion on weaker market prices of coal.
READ: Semirara Q1 earnings down 28% on lower coal prices
Real estate unit DMCI Homes contributed P879 million to the group’s earnings, a 12-percent decline due to lower revenues.
Meanwhile, lower fuel expenses and higher electricity demand nearly doubled the income of DMCI Power to P264 million from P134 million.
Project delays
Engineering and construction subsidiary DM Consunji Inc. saw a 64-percent drop in profit to P98 million as project delays pulled down earnings.
DMCI Mining recorded a net loss of P22 million, a reversal of its P473-million net income in the same period last year, due to lower nickel grades and weaker selling prices.
Last month, DMCI acquired cement manufacturer Cemex Holdings Philippines Inc. for $305.6 million.
READ: Consunji buys Cemex PH in $305.6-M deal
Consunji hopes to turn around Cemex’s P2-billion net loss by next year as he expects “ongoing capacity expansion and the clear synergies it brings” to the DMCI group to generate profit.
According to him, Semirara can bring in “more affordable” coal for the cement maker, while Cemex can provide around 400,000 metric tons of cement for DMCI Homes.
DMCI had priced its acquisition of Cemex at P1.42 per share, way below the latter’s initial public offering price of P10.75 eight years ago.
This values Cemex at P19.5 billion, which is also lower than its market capitalization of P25.6 billion, according to analysts.