DMCI sees lower income this year

MANILA, Philippines - Consunji-owned DMCI Holdings Inc. said it expects a lower core income this year, dragged by its coal and nickel mining businesses.

But the rehabilitation and expansion of existing power facilities will allow the firm to enjoy steady profits in the long run, company officials said yesterday.

“Core income will be a little lower but total income will be higher because of the sale of Maynilad Water Services Inc. shares,” Isidro Consunji, president and CEO of DMCI Holdings, told reporters.

He said DMCI Holdings will earn less given its lower holdings in Maynilad. Early this year, partners DMCI Holdings and Metro Pacific Investments Corp. sold a 20-percent stake in Maynilad to Japan’s Marubeni Corp. for roughly $400 million.

Consunji said the company currently does not have any nickel mining operations in Zambales due to permitting issues while the accident in the Semirara coal mine negatively affected operations.

In February, a section of the Panian pit west wall gave way, prompting Semirara Mining Corp. to stop commercial operations until March.

In 2012, profits of DMCI Holdings inched up two percent to P9.79 billion from P9.59 billion a year ago. The modest increase was attributed to the decline in global commodity prices and increased cost of labor and materials.

However, DMCI Holdings expects to book a one-time gain of around P8 billion from the sale of its shares in Maynilad.

Moving forward, the holding firm is banking on infrastructure projects and power generation for further growth.

Consunji said DMCI Holdings, given its expertise, aims to be the contractor for various Public-Private Partnership (PPP) projects.

Last week, diversified conglomerate San Miguel Corp. hired the Consunji family’s construction firm D.M. Consunji Inc. to build the Ninoy Aquino International Airport expressway Phase 2 project.

The company also lined up several power generation projects like the $450-million Calaca power plant expansion that will add 300 megawatts (MW) to the Luzon grid.

“Power will be the most steady (income contributor) and it does not have much risks,” Consunji said.

DMCI Holdings chief finance officer Herbert Consunji said the company will likely secure bulk of the project’s financing requirements from banks.

Given robust demand, the Luzon grid needs another 600 MW of generating capacity to avert a shortfall in 2016.

Semirara, through subsidiary SEM Calaca, is also conducting the rehabilitation and upgrade of the two existing units of the Calaca power plant. The power plant, which was acquired in 2009 for $361.7 million, will operate at a capacity of 550 MW from the current 320 MW.