Water and mining businesses prop up DMCI 1st-qtr profit
Consunji-led DMCI Holdings Inc. (DMCI) reported a 227-percent jump in net profit in the first quarter of the year to P774.9 million from P237.1 million in the same period a year ago as revenues grew 19.2 percent to P5.96 billion.In a report to the stock exchange, the listed firm said significant operational and financial improvements in the water investment and the growth in the coal mining sector along with the sustained real estate and construction businesses contributed to the improved operations.DMCI’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 west portion of Metro Manila.First-quarter net contributions from the water business reported a huge growth from the P87-million loss in 2008 to an income of P337 million in 2009. Water operating efficiencies continued to improve as Maynilad reported a 67-percent increase in first quarter net income from P349 million in 2008 to P582 million in 2009, of which DMCI’s beneficial share is P147 million and P238 million, respectively.While the company’s construction revenues were down by 8 percent, first-quarter net contributions from construction almost doubled from P86 million in 2008 to P157 million in 2009. Improvements in the general construction segment accounted mainly for the increase in construction contributions.The general construction business unit, reported under wholly-owned and flagship construction company, D.M. Consunji Inc. (DMCI), registered net income of P135 million for 2009 from P45 million in 2008 despite slightly lower revenues.“As existing project reached final completion stages, revenues were slightly down but costs margins were also lower much a factor of the change orders and timing differences in accepted billings over actual costs,” stated DMCI.This year DMCI is well positioned with newly awarded major projects worth P16 billion, particularly with the Raffles Residences and Fairmont Hotel projects awarded by the Kingdom Group from the United Arab Emirates; 168 Residences of the Yeloofa Group from China; and the Skyway Extension project from Bicutan to Alabang awarded by the Citra Group.These projects are expected to provide considerable construction business to the company starting this year.The real-estate business led by wholly owned DMCI Project Developers Inc. (PDI), for its part, recognized sustained operations for the quarter despite a 14 percent decrease in net income. Higher unit cost for this period’s sales mix, which includes high-rise units, significantly caused the decline in real-estate contributions.First-quarter revenues of P1.089 billion this year was 10 percent higher from the P985 million last year, with sales volume reaching 478 residential and 115 parking units compared to last year’s 413 residential and 188 parking units.Meanwhile, DMCI’s coal mining business, operated by 56 percent-owned Semirara Mining Corp. reported an improvement in operating results for the period compared with last year.“Despite a slight 4-percent slowdown in coal sales volume, a 55-percent increase in composite prices caused Semirara revenues and net contributions to go up by 49 percent and 124 percent, respectively. Coal mining contributions would have been higher if not for the almost four times leap in government royalties as a result of higher revenues,” said DMCI.