DMCI allocates ₧31B for 2019 capital outlay

ENGINEERING conglomerate DMCI Holdings Inc. is allocating P31 billion in capital expenditures this year, slightly higher than its actual spending in 2018.

The figure excludes the spending for Maynilad Water Services Inc., in which DMCI only had a minority interest, said Herbert M. Consunji, the company’s chief finance officer.

He said the spending this year was higher than last year’s actual spending of about P27 billion.

Consunji said the bulk of the spending of about P18 billion will be for its property development arm, DMCI Homes, which is targeting about P38 billion in reservation sales; P18 billion for Semirara Mining and Power Corp.; P1.3 billion for its off-grid electricity supplier DMCI Power Corp.; and the rest will be for its other units.

DMCI ended 2018 with a net income of P14.5 billion, a 2-percent decline from the previous year’s P14.8 billion. Revenues were slightly higher by 3 percent to P83 billion from the previous year's P81 billion.

For the fourth quarter alone, DMCI Holdings recorded P3 billion in net income, slightly lower than P3.1 billion during the same period in 2017.

“Our real estate, construction, offgrid power, mining and water businesses delivered healthy returns in 2018, but the weaker-than-expected performance of Semirara Mining and Power Corp. [SMPC] tempered our consolidated profits,” DMCI Holdings Chairman and President Isidro A. Consunji said. “SMPC faced a series of unforeseen setbacks like the prolonged shutdown of Unit 1 of Southwest Luzon Power Generation Corp., inclement weather and China’s soft ban on coal imports. ”

Excluding nonrecurring income of P38 million in 2018 and one-time loss of P281 million in 2017, core net income of DMCI Holdings fell 4 percent year-on-year to P14.5 billion from P15 billion.

The P38 million nonrecurring income is attributable to a P715million gain on the sale of land by DMCI Homes and a P679-million share in accelerated depreciation of Sem-Calaca Power.

Meanwhile, the one-time items in 2017 included a P117-million share in Maynilad’s redundancy and right-sizing costs, and a P164-million share in the accelerated depreciation of Sem-Calaca Power, among others.

Net income contributions from SMPC fell 14 percent to P6.8 billion, from P8 billion due to a 12-percent drop in coal sales and the nearly eight-month shutdown of Southwest Luzon Power Generation Corp. (Unit 1).

Excluding nonrecurring items, SMPC’s core income attributable to DMCI Holdings declined 8 percent from P8.1 billion to P7.4 billion.

DMCI Homes registered a 9-percent increase in net earnings to P3.9 billion, from P3.6 billion due to a 3-percent rise in revenues and a one-time gain of P715 million on sale of land.

Off-grid energy business DMCI Power saw its net earnings surge 30 percent to P465 million from P359 million, driven by a 25-percent increase in energy sales volume.

Meanwhile, DMCI Mining registered a modest income growth of 4 percent to P117 million, from P113 million. The increase was due to a 22-percent rise in nickel shipment volume of higher-grade nickel.

Net earnings share from affiliate Maynilad increased 7 percent to P1.8 billion from P1.6 billion, following a 3-percent increase in billed volume boosted by an inf lation rate adjustment of 2.8 percent in January and a 2.7-percent basic charge increase in October.