DMCI sees 10% growth in net income in 2012

Consunji-led DMCI Holdings Inc. expects to grow its net profit by 10 percent this year as the start of operations of the Calaca power plant and better construction and property businesses may offset the impact of softer coal prices.

The 10-percent full-year profit guidance was “barring bad news from China,” DMCI president Isidro Consunji told reporters at the sidelines of DMCI’s annual stockholders’ meeting.

DMCI chalked up a net profit after minority interest of P9.59 billion in 2011 compared with P7.87 billion in the previous year. This year’s guidance is seen bringing full-year profit to P10.5 billion.

The conglomerate is also planning to buy into a new mining project. “It’s under negotiation. We’re looking at several nickel mines,” he said.

Consunji said the slowdown in coal prices would indeed eat into the earnings of coal mining unit Semirara Mining this year. “We’re projecting that Semirara’s income from coal mining will be just the same as last year’s,” he said when asked about the first-semester results of the subsidiary, which has been a significant contributor to group-wide profit.

He said coal prices were down by about 15-20 percent in the first half globally but this was somehow offset by an increase in sales volume and by increasing sales to the local market.

“Better cost control is how Semirara manages the impact of slower coal prices. Hopefully, income from power will somewhat offset the reduction in prices,” he said.

This year, Consunji said that five million of the seven million tons of coal output of Semirara would likely be sold to the domestic market. The plan was to bring down the export share to one million. “The year after (2014) it will be down to zero,” he said.

The rehabilitation by Sem-Calaca Power Corp.’s power plant had been delayed due to technical problems, Consunji said. “We underestimated the contingency factor,” noting though that the rehabilitation had finally been completed.

The construction segment of the business was doing okay but noted that certain big-ticket infrastructure projects had been delayed, Consunji said. Recently, for instance, the government sought a review of the Metro Railway Transit-7 project of San Miguel Corp., which sought to build an elevated railway from Quezon City to Bulacan.

“The (positive) PPP impact will not be this year but next year,” he said. He noted that demand for construction from the private sector had been good especially from the power-generation segment. “We expect additional construction projects,” he said.

Meanwhile, he said the property development segment was “very strong” all over the country.