DMCI Holdings income plunges 84.5% in Q1

DMCI Holdings Inc., the investment arm of the Consunji family, experienced a major slowdown in the first quarter as  its net earnings dropped  84.5 percent due to extraordinary items and other costs booked in the water business.

In its financial report to securities regulators, DMCI said its net income amounted to only P44.73 million this year, from P289.54 million a year earlier.

The strong performance of its real estate, construction and coal mining units, however, offset lower earnings as revenues grew 67.31 percent to P4.35 billion.

Gross profit likewise rose 19.8 percent to P776.47 million from P648.14 million.  Operating income, however, fell 45.16 percent to P260.41 million as cost of sales and services jumped 82.6 percent.

The water business, shared equally through a consortium with Metro Pacific Investments Corp. (MPIC), reported adverse results during the period. DMCI’s share in net losses from the water business for the first quarter of 2008 was at P241 million, a huge reversal from the P172-million share in net income the previous level.

Net interest expense from loans at the consortium level amounted to P272 million from P84 million last year, half of which DMCI shares with MPIC. These loans were obtained to solidify the acquisition of Maynilad Water Services, Inc. and are expected to be fully settled within the year.   

Maynilad, effectively 42 percent owned by DMCI, reported a P629-million foreign exchange losses from the retirement of its outstanding debt under rehabilitation.   This was part of the consortium’s efforts to ease Maynilad out of rehabilitation and into a more unrestricted operational and financial position. 

Excluding the foreign exchange losses, Maynilad’s first quarter recurring income would have been P611 million, up 39 percent from P439 million in 2007.

DMCI’s wholly-owned real estate unit DMCI Project Developers Inc. reported a 42-percent growth in net income on the back of a 34-percent rise in revenues.  This was due to increased sales and an effective higher selling price of the new projects provided.

Among these projects include Alta Vista Boracay, Manors at Celebrity Place, Raya Gardens, Rosewood Pointe and Riverfront Residences.

Existing projects  East Ortigas Mansions, Vista De Lago and Bonifacio Heights were essentially sold out and only contributed negligible recognized sales for the period.  

For its construction business,  D.M. Consunji Inc. reported a 130-percent jump in revenues, mainly due to increased works from outside contracts and construction from the water business. Finalized billings on construction of Shangri-La Boracay, Robinsons One Adriatico and CybergateTower accounted for a sizeable share of the revenues for the period.

For its coal mining business, Semirara Mining Corp.  reported a 16.65-percent jump in net profit t P139,91 million a year ago from P119.94 million on  robust sales.