DMCI Holdings income soars 82% to P1.41 billion in 1st quarter

MANILA, Philippines - DMCI Holdings Inc., the listed investment holding firm of the Consunji family, posted a net income of P1.41 billion in the first quarter this year, up 82 percent from P775 million, a year earlier, largely due to the significant performance of its construction and mining units along with the steady growth of its water business.

In a disclosure to the Philippine Stock Exchange, DMCI said revenues jumped 77.35 percent to P10.57 billion from P5.96 billion. Of the total, P3.81 billion came from its mining business, followed by construction which contributed P3.48 billion.   

Sales from real estate, on the other hand, fell to P751.98 million from P1.09 billion.  

DMCI said construction was the main driver of growth for the company due to the revenues recognized from works on new bigticket projects. Also, the mining business, particularly coal mining, doubled contributions as coal deliveries to both exports and domestic customers picked up.

The company’s investment in the water sector is recognized through a consortium with Metro Pacific Investments Corp. (MPIC) and operated through Maynilad Water Services Inc., the water utility for the western portion of Metro Manila.

Despite a spike in operations, first quarter net contributions from the water business reached P391 million this year compared to P337 million in 2009, due much to the consortium adjustments recognized which extraordinarily increased. 

The construction business, operated under D.M. Consunji Inc., more than tripled its net contributions from P145 million last year to P500 million this year. General construction and engineering works from local buildings and domestic infrastructure projects coupled by foreign steel fabrication contracts boosted the operational results from the construction sector.

The newly awarded major contracts (worth P16 billion) caused the massive 285 percent increase in DMCI construction revenues from P978 million to P2.787 billion this year. Building construction revenues amounted to P579 million compared to P411 million last year, but now accounted for only 21 percent of total general construction revenues.

The company’s steel fabrication business, reported through its 98 percent  owned steel fabrication company, Atlantic Gulf and Pacific Co. of Manila Inc. (AG&P) reported a more than seven-fold increase in first quarter net contributions to P110 million. New projects, namely the BP Whiting - Coker project, accounted for P411 million of period revenues and significantly provided the push in the top line.

DMCI said it was still open to offers to purchase AG&P. Nevertheless, the company is confident that aside from its current orderbook of mostly offshore oil and gas related contracts, AG&P’s competence in steel fabrication can be a strategic auxiliary. 

Meanwhile, the housing segment posted a 24 percent growth in net contributions from P134 million last year to P166 million this year despite a 31 percent drop in realized revenues. Realize housing sales declined to P752 million from P1.09 billion.

Sales from new projects, East Raya, Magnolia Place, Ohana and Royal Palm - all contributed to maintain respectable quarter revenues but it is the cost estimate adjustments coupled by higher priced projects (Royal Palm, Tivoli, Riverfront, Magnolia Place, East Raya) that helped boost gross margins, improving income despite the drop in top line.