DMCI raises capex to over P40B this year
DMCI Holdings, Inc. is setting aside P40.7 billion in capital expenditures this year, the bulk of which will go into its property and integrated energy businesses, company officials said on Tuesday.
“Without Maynilad [Water Services, Inc.], capex is P31.5 billion,” Herbert M. Consunji, DMCI chief finance officer, told reporters after the holding firm’s annual stockholders’ meeting at the Manila Polo Club in Makati City.
Of the P31.5 billion, Mr. Consunji said P16 billion had been allocated to DMCI Homes, Inc., while Semirara Mining and Power Corp. would get P13 billion.
DMCI Power Corp., the firm’s off-grid energy developer, has a budget of P2.034 billion, which will go largely into the development of a 15- megawatt ( MW) coal-fired power plant in Masbate province.
Last year, DMCI Holdings allocated P34 billion as capital expenditure, or P19.71 billion excluding the budget for Maynilad.
DMCI Homes President Alfredo R. Austria said the property business is a bright spot for the group this year, with new projects breaking ground in the cities of Pasay, Manila, Parañaque and Pasig.
“[ In] Davao, we’ll probably have another one before the end of the year. Next year, we’re looking at Cebu,” he said about the plans of DMCI Homes to further expand outside Metro Manila.
Many of DMCI Homes’ projects cater to the middle-class, up- scale Filipino market, including those with preference for units in low-rise residential projects.
Mr. Austria said the company is continuously acquiring “reasonably priced” properties to add to its landbank.
One of the factors that have added to the business segment’s performance, Mr. Austria said, is the demand from the Chinese market, which has cornered about P6 billion of the P21-billion sales and reservations as of April this year.
“They are also selective,” the DMCI Homes official said, adding that the company had launched projects near the business districts. “It just so happened that we launched projects near BGC ( Bonifacio Global City) and Makati, and very attractive to them.”
Mr. Austria said DMCI Homes had placed a cap on its sales to the Chinese market by not selling a portion of their newly launched projects and allocating it to Filipinos, who take time to decide on property acquisition.
DMCI Holdings Chairman and President Isidro A. Consunji said without the cap, Chinese buyers would have cornered 80% of the new property projects.
“We didn’t really expect the Chinese buyer,” he said.
Company officials said they were going to adjust this year’s sales target to P40 billion after aiming for P31 billion late last year. In 2017, they said the company reached P40 billion in property sales.
During the same briefing, Mr. Consunji said DMCI Holdings had deferred plans to venture into renewable energy, including setting aside its possible foray into run-of-river power development projects.
He said the group’s venture into renewable energy had been “postponed until better times.”
On Tuesday, shares in DMCI Holdings jumped 2.62% to close at P10.98 each.