CONSUNJI-LED engineering conglomerate DMCI Holdings, Inc. recorded a 25% drop in its first-quarter consolidated net income to P5.6 billion from P7.5 billion last year due to lower contributions from most of its businesses and stabilizing commodity prices.
The company’s first-quarter net earnings rose by 19% from P4.7 billion in the previous quarter, and almost doubled compared with the P2.9 billion net income in the first quarter of 2019, DMCI Holdings said in a stock exchange disclosure on Wednesday.
First-quarter consolidated revenue fell by 17% to P27.4 billion from P33 billion last year as a result of stabilizing coal, nickel, and electricity prices, lower construction accomplishments, fewer real estate accounts that qualified for revenue recognition, and higher real estate sales cancellations.
“Market prices pose a significant challenge for us this year. 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,” DMCI Holdings Chairman and President Isidro A. Consunji said.
“To mitigate these external challenges, we will focus on improving operational efficiency and refining our marketing strategies to enhance the value of our products and services,” he added.
Among DMCI’s businesses, the net income contribution from coal producer Semirara Mining and Power Corp. (SMPC) declined by 27% to P3.7 billion from P5.7 billion in 2023 due to weaker market prices that muted the impact of higher coal shipments and electricity dispatch.
DMCI Homes contributed P879 million, down by 12% from P994 million, because of revenue recognition slowdown from ongoing and new accounts.
Contribution from affiliate water provider Maynilad Water Services, Inc. rose by 28% to P664 million from P519 million owing to higher billed volume, better customer mix, and improved average effective tariff.
DMCI Power increased its net income contribution by 97% to P264 million from P134 million driven by increased generation capacity and electricity demand, coupled with lower fuel expenses.
D.M. Consunji, Inc. contributed P98 million, down by 64% from P273 million, due to project delays and fewer ongoing projects.
DMCI Mining recorded a P22 million net loss, a turnaround from the P473 million net income, due to decreased shipments, lower nickel grades, and weaker selling prices.
Previously, DMCI Holdings, SMPC, and Dacon Corp. acquired Cemex Holdings Philippines, Inc. (CHP) for $305.6 million under a share purchase agreement to bolster the conglomerate’s portfolio. The transaction is expected to close before the end of 2024.
DMCI bought the entire shares of Cemex Asia B.V. in Cemex Asian South East Corp. (CASEC), the majority owner of CHP with an 89.96% equity interest.
DMCI will acquire a 56.75% stake in CASEC, Dacon will secure 32.12%, and SMPC will purchase the remaining 11.13%.
Dacon has been appointed as the bidder for the mandatory tender offer to acquire the remaining 10.14% of the total issued and outstanding capital stock of CHP.
On Wednesday, DMCI Holdings shares fell by 2.51% or 28 centavos to P10.88 each. — Revin Mikhael D. Ochave
DMCI Holdings net income falls 25% to P5.6 billion in first quarter
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