CONSUNJI-LED DMCI Holdings, Inc. recorded a huge profit fall in the first quarter, citing low market prices and the impact of the government’s quarantine measures to arrest the spread of the global pandemic since the latter half of March.
In a stock exchange disclosure, Thursday, the diversified conglomerate said it saw a 78% decline in net income in the quarter to P616 million from P2.7 billion in the same period in 2019.
Its core net income dropped by 64% to P1 billion from P2.8 billion in the same quarter a year ago, excluding a P414 million non-recurring loss due to sales cancellations for a DMCI Homes project in Davao City and a net loss of P91 million from the company’s share in the depreciation of the two power plant units of Sem-Calaca Power Corp. in 2019.
“Our consolidated results were weighted down by operational headwinds, low market prices and the initial effects of the enhanced community quarantine (ECQ),” DMCI Holdings Chairman and President Isidro A. Consunji said in a statement.
Semirara Mining and Power Corp.’s contribution to the listed holding firm’s core net income went down 51% to P623 million in the January-March period from P1.3 billion in the same quarter last year as average coal prices decreased by 16% and average electricity prices were down 27%.
DMCI Homes posted a core net loss of P197 million, lower than the P481 million it earlier recorded, due to slowdown in revenue recognition as the ECQ has impeded collections and completion of construction projects and as the construction cost for completed units in the preceding year has increased.
DM Consunji, Inc. delivered a lower income contribution to its parent, down 53% to P170 million from P359 million, citing lower margins for a number of projects, higher depreciation, and productivity losses related to quarantine measures.
DMCI Power Corp.’s contribution to the holding company also fell by 3% to P97 million from P100 million because of lower electricity dispatch in favor of hydropower plants in Oriental Mindoro.
DMCI Mining Corp. chipped in P26 million, lower by 75% from last year’s P103 million, as shipment of lower-grade nickel fetched lower prices in the market.
Further, Maynilad Water Services, Inc. remitted a net income contribution of P379 million to DMCI Holdings, 13% lower compared with first-quarter 2019’s P436 million, as it was affected by lower water consumption among commercial and industrial customers, and higher depreciation and amortization due to its capital expenditure program.
Mr. Consunji said that the next quarters will be more challenging for the firm as he expects the full impact of the virus-related restriction measures on its businesses.
“We expect the succeeding quarters to be even more challenging because of the full impact of the coronavirus containment measures,” he said.
On Thursday, shares in DMCI Holdings declined by 2.82% to close at P4.13 each. — Adam J. Ang