DMCI Holdings posts 89% income growth

MANILA, Philippines - Consunji-led holding firm DMCI Holdings Inc. reported a net income of P8.85 billion last year, up 89 percent from P4.68 billion in 2009 on one-off gains and strong growth of its construction, mining and power units.

 The increase in DMCI’s earnings was boosted by gains from the sale of human resources firm Atlantic Gulf & Pacific Co. of Manila last December. DMCI sold its 98.19 percent stake in AG&P to a group of local and foreign investors that include Kuwaiti China Investment Co. The deal was valued at P1.75 billion.

Meanwhile, earnings from the construction division more than doubled to P1.67 billion while the mining business chipped in P2.19 billion, or an increase of 87.7 percent from the previous year’s contribution due to higher sales volume and coal prices.

The company earlier said sales volume reached nearly seven million metric tons, at the upper end of management’s target of six to seven million tons.

 The power business contributed P886 million, more than 18 times the P47 million recorded a year earlier.

The real estate business, on other hand, registered net earnings of P1.27 billion, 25 percent higher than the previous year’s figure of P1.02 billion.

Earnings from Maynilad Water Services Inc. rose 12.7 percent to P1.89 billion from P1.67 billion. The Consunjis own 42 percent of Maynilad, which received approval for its P450-billion capital expenditure program until the end of its concession.

DMCI also has a 58 percent stake in Semirara Mining Corp., which added significant value to existing coal mining operations with its entry into power generation.

The group is aiming to produce a total of 1,550 megawatts of power by 2013, from zero for most of 2009. This will be done through through the rehabilitation of the Calaca coal plant and the addition of the 600-MW brownfield project.

DMCI closed flat yesterday at P33 each share. “At its current price of P33 per share, the stock is currently trading at 8.7 times its FY 2011 price earnings, which is a steep discount to the 14.1 times PE of local conglomerates and the 13.8 times PE of the market,” noted stock brokerage firm CitisecOnline said.