DMCI Q2 Earnings Hit by Weak Sectors

CONSUNJI LED conglomerate DMCI Holdings, Inc. posted a 32% decline in its second-quarter net profit to P5.5 billion from P8.1 billion last year due to weaker performance of its subsidiaries in the energy, real estate and mining sectors.

“The decline was largely due to weaker performance of the integrated energy, real estate and nickel mining subsidiaries. Improved results from the water, off-grid energy and construction companies have partially offset the downturn,” DMCI Holdings said in a statement to the stock exchange on Tuesday.

Total revenue in the second quarter fell 24% to P28.09 billion from P36.96 billion in 2023 due to “softer commodity and electricity prices, reduced construction performance, increased reversals of real estate sales cancellations and fewer current and new real estate accounts . qualify for recognition.”

“We are now in the new normal. Market prices and global supply chains have normalized, so our challenge is to strategically manage costs, optimize operational efficiencies and capitalize on synergies between our business units,” said Chairman and President of DMCI Holdings Isidro A. Consunji.

Among the business units, the net profit contribution of coal producer Semirara Mining and Power Corp. decreased. by 41% to P3.4 billion in the second quarter, compared to P5.8 billion last year when energy markets normalized. Higher sales volumes of coal and electricity softened the impact of lower sales prices.

DMCI Homes posted a net profit of P737 million, down 43% from P1.3 billion, due to lower real estate revenues and higher operating expenses, which were partially offset by higher contributions from joint venture construction revenues, rentals and forfeitures.

The conglomerate’s water partner, Maynilad Water Services, Inc., saw a 54% increase in net profit contribution to P732 million due to higher billed volume, higher average effective rate and slower growth in cash, non-cash and financial costs.

DMCI Power posted a record high of P355 million in net profit, up 54%, led by double-digit growth in power distribution and lower direct costs.

DM Consunji, Inc. increased its contribution to net income by 73% to P240 million thanks to lower cash and non-cash costs, lower tax provisions and higher financial income.

DMCI Mining generated a net loss of P43 million compared to a net profit of P250 million last year due to weak market prices, reduced shipments and costs incurred at the Palawan mine.

For the first half, DMCI Holdings recorded a 29% decline in net profit from P15.6 billion in 2023 to P11.1 billion, due to lower contributions from coal mining, power grid, real estate and construction companies. as a net loss in nickel mining.

Consolidated revenue fell 21% to P55.52 billion from P69.99 billion last year due to “anemic coal, nickel and energy prices, lower construction performance and reduced recognitions on real estate accounts.”

“Stronger contributions from the water and off-grid segments have partially mitigated lower revenues from other units,” the report said.

On Tuesday, shares of DMCI Holdings rose 1.64% or 18 centavos to P11.16 each. – Revin Mikhael D. Ochave