DMCI 2014 profit fall 43% on lower sales

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DMCI Holdings Inc, a conglomerate owned by the Consunji family, posted lower net income last year due to the absence of a non-recurring gain as well as losses incurred by its power and construction subsidiaries.

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In a statement, DMCI said its net income slumped by 43 percent to P10.77 billion from P18.93 billion despite revenues gaining 1 percent to P56.56 billion from P55.97 billion in 2013.

If not for the absence of a one time gain — a P8.35-billon non-recurring profit from DMCI’s sale of a 16-percent stake in Maynilad Water Services Inc. to a unit of Marubeni Corp. — the company’s core net income is only lower by 3 percent to P10.25 billion from P10.57 billion a year ago.

Its power and construction business segments dragged DMCI Holdings’ profits despite the improvement in its other businesses such as mining, real estate and water utilities.

“The resilience of our engineering diversification strategy was apparent in 2014. Despite the weaker-than-expected results of two business segments, we were able to stabilize the overall profitability of our investment portfolio,” DMCI Holdings Chairman and President Isidro A. Consunji said.

Its power unit, DMCI Power Corp, saw a 42-percent drop in its net income to P2 billion from 2013’s P3.5 billion on the technical and commissioning delays that extended the outage of the Power Unit 2 of SEM-Calaca Power Corp. It resulted in exposure to higher prices in the Wholesale Electricity Spot Market (WESM) for its power replacement in the first half of 2014.

Net income of its construction arm D.M. Consunji Inc. also ended lower — down 62 percent to P479 million from P1.3 billion the previous year — on cost overruns for a power plant construction contract as well as the delay in major public infrastructure projects due to right-of-way and utility relocation issues.

Its mining, property and water businesses recorded positive turnout last year, and its mining units more than doubled its net income during the period on higher sales volume and better average prices.

Semirara Mining and Power Corp. saw its profits soar by 125 percent to P2.3 billion from P1 billion, while another mining unit DMCI Mining Corp. has surged its net income by 114 percent to P362 million from P169 million a year ago.

Its property subsidiary DMCI Homes also advanced its net income by 22 percent to P3.2 billion from P2.7 billion on robust real estate demand.

DMCI Holdings also posted higher net earnings share in its water utilities affiliate Maynilad, as its profit share improved by 6 percent to P2 billion from P1.9 billion.

Despite the one-time gain and the subsidiaries’ performance for the full year 2014, DMCI Holdings has also recorded a P173-million net loss in its share in the initial operations of Private Infra Dev Corp. (PIDC) after the Consunji-led firm sold its entire 25.11-percent stake in PIDC to San Miguel Corp. (SMC) subsidiary Rapid Thoroughfares Inc.

The transaction amounted to P1.83 billion and was closed on December last year.

PIDC is an all-Filipino consortium led by Rapid Thoroughfares Inc., DMCI Group and D.M. Wenceslao & Associates Inc., which is the concessionaire of the P19-billionTarlac-Pangasinan-La Union Expressway (TPLEX) project under a public-private partnership (PPP) scheme.

Incorporated in 1995, DMCI Holdings holds the Consunji Group’s real estate and construction business (D.M. Consunji Inc. and DMCI Project Developers Inc.), coal mining and exploration (Semirara Mining Corp.), power generation (DMCI Power Corp.), coal and nickel ore exploration (DMCI Mining Corp) and real estate (DMCI Homes).

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