Diversified engineering conglomerate DMCI Holdings, Inc. reported a 20 percent decline in consolidated net income to P24.9 billion last year from the near-record P31.1 billion it earned in 2022.
“We saw sharp corrections in commodity and energy prices in 2023 but because our businesses did very well in terms of production and sales volume, we managed to prevent a severe decline in our profitability,” said DMCI Holdings Chairman and President Isidro A. Consunji.
In a disclosure to the Philippine Stock Exchange, the firm said higher net income contributions from the real estate, off-grid energy, and water utility businesses muted the impact of lower contributions from the integrated energy, nickel and construction subsidiaries.”
Average Newcastle and Indonesian Coal Index 4 prices dropped by 64 percent and 26 percent, respectively, while Philippine Freight on Board nickel price (for 1.30 percent Ni) fell by 30 percent.
Average effective spot settlement price (ESSP) for all grids across the Philippines likewise declined double digits at 18 percent.
In 2023, consolidated revenues dropped by 14 percent to P122.8 billion from P142.6 billion the prior year due to normalizing coal, nickel and electricity prices, alongside a slowdown in construction and real estate activities, and an increase in revenue reversals stemming from the cancellation of real estate sales.
Excluding a 2022 non-recurring loss of P93 million mostly from the asset write-down of two gas turbines under Southwest Luzon Power Generation Corporation and a net non-recurring gain of P46 million mostly attributable to gain on sale of land by DMCI Homes in 2023, consolidated core net income decreased by 20 percent from P31.2 billion to P24.7 billion.
For the fourth quarter alone, DMCI Holdings recorded a consolidated net income of P4.7 billion, a 36 percent expansion from P3.5 billion last year due to higher revenues and better profit margins.
Consequently, consolidated core earnings rose by 30 percent from P3.6 billion to P4.6 billion.
Consolidated revenues increased by 8 percent from P28.3 billion to P30.4 billion on higher coal exports while EBITDA margin widened from 29 percent to 32 percent due to controlled operating costs and higher other income from DMCI Homes and SEM-Calaca Power Corporation.
Contribution from Semirara Mining and Power Corporation declined by 30 percent from P22.7 billion to P15.8 billion on the combined effect of all-time high coal shipments and electricity sales amid stabilizing prices.
DMCI Homes contributed P4.6 billion in core earnings, a 2 percent uptick from P4.5 billion because of better selling prices and higher income from rental and forfeiture fees.
Affiliate Maynilad contributed P2.1 billion, a 42 percent improvement from P1.5 billion on account of higher water production, billed volume and adjusted tariff.
Contribution from DMCI Power swelled by 29 percent from P742 million to P959 million on increased gross generation and electricity dispatch.
D.M. Consunji, Inc. showed a 2 percent drop in net income from P587 million to P573 million due to lower project accomplishments on fewer ongoing projects.
DMCI Mining contribution plunged by 49 percent from P1.3 billion to P655 million on lower nickel prices and higher shipping costs.
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The article was originally published in Manila Bulletin and written by James A. Loyola.
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