CONSUNJI-LED infrastructure conglomerate DMCI Holdings Inc. said its net income dipped by 5 percent to P6.2 billion in the first six months of the year from P6.6 billion a year earlier due to lower contributions from its real estate, nickel mining and water businesses.
The company also recorded a P210.6-million one-time gain from the sale of its 10 percent stake in Subic Water to the city of Olongapo. Without this one-time gain, the company’s core net income declined 7 percent from a year ago to P6.1 billion.
“Since last year, we have been anticipating an earnings slowdown in DMCI Homes because of the deferred recognition of revenues from its completed high-rise projects. The expiration of Maynilad’s income tax holiday in 2015 also affected our bottom line,” said Isidro A. Consunji, DMCI Holdings chairman and president.
“For the second half of the year, we expect even weaker results from DMCI Mining because of suspended operations of its mining units in Palawan and Zambales,” he added.
The Department of the Environment and Natural Resources (DENR) earlier suspended the operations of Berong Nickel and Zambales Diversified Metals Corp. for failing to comply with environmental laws.
In terms of net income contributors, Semirara Mining and Power Corp. had the highest share, increasing its net income by 34 percent to P3.6 billion from P2.7 billion a year ago driven by higher coal exports and additional sales from its new plant Southwest Luzon Power Corp.
Maynilad was the second-highest profit contributor although it saw its net income contract by 4 percent to P1.1 billion from P1.15 billion a year earlier due to the tax holiday expiration and additional 5 percent increase in average effective tariff.
DMCI Homes posted P708 million net income in January to June due to slower collections as the company shifted to developing more high-rise projects last year, which normally takes around three years to complete.
“We expect income recognition to rebound by 2018. This is really just a timing issue for DMCI Homes,” Consunji said.
Its construction unit, DM Consunji Inc. saw P397 million net income, while off-grid energy supplier DMCI Power Corp. saw net income increase by 12 percent to P241 million, lifted by the operation of its 15-megawatt power plant in Calapan, Oriental Mindoro.
Profit of the holding firm and the rest only amounted to P42 million.
Herbert Consunji, DMCI Holdings chief financial officer (CFO), said that with the suspended mine operations of DMCI Mining, the company is looking at new growth areas that can buoy the group’s profit and earnings.
“We’re looking at a new construction-related business. This is entirely new apart from DM Consunji,” the CFO said, refusing to give further details.
DMCI Holdings is a listed conglomerate led by the Consunji family, holding the group’s other business segments: real estate and construction (DMCI Homes, D.M. Consunji Inc.
and DMCI Project Developers Inc.), power generation and mining (Semirara Power and Mining Corp., DMCI Power and DMCI Mining), and water utilities in partnership with Manny V. Pangilinan’s Metro Pacific Investments Corp. (Maynilad Water Services Inc.), among others.