DMCI earnings fall in third quarter as building delays persist

MANILA, Philippines — A halt in construction activities and weak mining revenues hurt DMCI Holdings Inc.’s earnings despite the economy largely back to business in the third quarter.

In a statement on Tuesday, the Consunji engineering firm reported a net income of P1.9 billion in the July-September period, down 34% year-on-year from P2.8 billion same period a year ago. Nine-month consolidated net income, in turn, dropped 58% on-year to P3.9 billion.

Excluding non-recurring items, core net income for the third quarter slipped 27% annually also to P1.9 billion. That brought the January to September figure to P4.5billion, down 52% from year-ago levels with consolidated revenues plummeting 33%.

“Among our businesses, Semirara and DMCI were hit hardest by the COVID-19 pandemic. We saw sharp drops in demand and prices for both coal and electricity because of the economic slowdown,” Isidro Consunji, chairman and president, was quoted as saying in a statement.

“Construction earnings deteriorated because of lower productivity and extraordinary expenses related to the coronavirus,” he added.

Indeed, broken down by business, data showed construction was largely responsible for the bleak financial performance. After large-scale projects were postponed by health risks and right-of-way issues, D.M. Consunji Inc. swung to a net loss of P97 million in the first 9 months.

Residential property building appeared more resilient, although DMCI Home still suffered a 40% contraction on core income contributions to the parent to P1.1 billion as of September. The company did not reveal the subsidiary’s net income.

Mining ventures, meanwhile, had varying fates depending on their produce. On one hand, Semirara Mining and Power Corp.’s contributions plunged 64% on-year to P1.7 billion “primarily due to anemic market conditions and imposition of coal import quotas in China.” Yet at the same time, nickel demand from Beijing more than doubled DMCI Mining’s earnings for parent to P252 million.

In a positive note, DMCI Power benefited from tariff increases and “higher electricity sales” while most people were staying at home. Earnings from this segment went up 18% year-on-year to P403 million.

In direct contrast, lower sales and average tariffs pulled down earning contributions from Maynilad Water Services Inc. by 22% to P1.2 billion. The holding company holds 27.2% stake on the Metro Manila water concessionaire, the largest next to majority stake held by Pangilinan-led First Pacific group.

Joining a broader market rally on Tuesday, shares at DMCI Holdings closed up 4.02% to P5.17 each.