Bullish commodity market yields record dividend payout at DMCI

A bullish coal and nickel global market has allowed Consunji-led DMCI Holdings and its subsidiary, Semirara Mining and Power Corp., to deliver to shareholders the highest dividend payout in the conglomerate’s history.

In a special board meeting, DMCI’s board approved P6.37 billion in special cash dividends, DMCI disclosed to the Philippine Stock Exchange on Tuesday.

This is on top of the P6.37 billion in regular and special cash dividends paid by DMCI in April this year.

With the additional cash dividend, DMCI will end the year with P12.75 billion in total dividend payments, equivalent to 194 percent of the company’s consolidated core net income in 2020. This marks the best dividend payout ratio in the history of DMCI, whose dividend policy commits at least 25 percent of the preceding year’s consolidated core net income.

The total annual dividend of 96 centavos this year reflects a cash dividend yield of nearly 12 percent based on its Oct. 11 closing price of P8.10 per share.

DMCI shareholders on record as of Oct. 26 are entitled to a special cash dividend of 48 centavos per share payable on Nov. 10 this year.

Shares of DMCI rose by 9.14 percent on Tuesday on news about the dividend payment, while stocks of its coal mining and energy subsidiary, Semirara, also jumped by 10.02 percent.

Semirara also declared P7.4 billion in special cash dividends, on top of the P5.3 billion in regular cash dividends paid in April.

Semirara shareholders on record as of Oct. 25 are entitled to a special cash dividend of P1.75 per share, the highest amount ever declared by the company. Ex-dividend date will be on Oct. 20, while payment will be made on Nov. 9 this year.

With this additional special cash dividend, the total dividend payout of Semirara to its shareholders for 2021 will be P12.7 billion, the highest in its history.

Its total annual dividend of P3 per share translates to a cash dividend yield of almost 12 percent based on its Oct. 11, 2021, closing price of P25.45 per share.

In the first semester of this year, DMCI was among the country’s best performing conglomerates in terms of net income delivered relative to market consensus forecasts.

DMCI’s six-month net profit amounted to P9.5 billion, nearly five times larger than the level seen last year, when quarantine restrictions were at their strictest in the second quarter. It delivered in the first semester 84.8 percent of full-year earnings expected by analysts, based on Bloomberg consensus forecasts.

Subsidiaries Semirara, DMCI Homes and DMCI Mining contributed most to the profit upswing. Consolidated core net income likewise surged by 217 percent year-on-year to P8.3 billion.

There was a nonrecurring gain of P1.2 billion booked this year relative to the revaluation of deferred tax liabilities as a result of the Corporate Recovery and Tax Incentives for Enterprises law while the comparative income last year recognized a P586-million loss mainly from sales cancellations for a real estate project.

As global coal and nickel prices rallied, the group ramped up production this year.

Semirara had thus contributed P3.7 billion in earnings in the first semester, about a threefold increase from the previous year, owing to its all-time high coal production in the first quarter, all-time high shipments in the second quarter and strong rebound in coal and electricity spot prices.

Nickel mining arm DMCI Mining contributed P818 million in profit in the first half, marking a 345-percent improvement year-on-year, driven by higher production, average grade and shipment amid a booming nickel market.

Contribution from DMCI Homes also soared by 6,018 percent to P2.3 billion from a low base of P38 million last year due to higher construction accomplishments and recognition of downpayment from new accounts.

—with a report from Ronnel W. Domingo