Diversified engineering conglomerate DMCI Holdings, Inc. (PSE: DMC) recorded flat earnings at P3 billion in the first three months of 2016. This includes the P111 million one­time gain on partial sale of its 10% share in Subic Water and Sewerage Company.

Excluding this non­recurring item, core net income stood at P2.93 billion, a 4% dip from P3.06 billion last year.

“We expect a weak bottom line this year because of a confluence of factors. Declining commodity prices, tapering electricity rates, and most of all, the termination of Maynilad’s six­ year tax exemption will drag down net income contributions from our businesses,” said DMCI Holdings Chairman and President Isidro A. Consunji.

Pulled Down

Reduced profitability of its two major income contributors accounted for the flattish growth of the Consunji holding company.

From P845 million, net income contributions from DMCI Homes dropped 21% to P665 million due higher costs on materials and labor, paid commissions and documentary stamps from its bond issuance.

Meanwhile, Maynilad posted a 24% drop from P527 million to P403 million, following the expiration of its income tax holiday in December 2015.

Losses

Seasonality in the shipping window and lower shipment volume due to depressed nickel ore prices led to a wider loss for DMCI Mining Corporation.

From a first quarter net loss of P24 million in 2015, the company’s bottom line further receded by 321% to P100 million during the same period this year.

Better Performance

The power and construction businesses fared better during the first reporting period. Semirara Mining and Power Corporation (SMPC) contributed P1.6 billion, a 16% improvement from the P1.4 billion recorded in the first three months of 2015.

Off­-grid supplier DMCI Power Corporation delivered P98 million, a 32% increase from P74 million last year. Higher electricity sales in Oriental Mindoro, Palawan and Masbate and the commercial operations of a 3x1.23 MW plant in Sultan Kudarat beginning January accounted for the income growth.

Despite a 12% drop in revenue, income contribution from D.M. Consunji, Inc. rose 3% from P191 million to P197 million, as total construction costs fell at a faster pace. From P3.1 billion the previous year, first quarter total construction costs declined 14% to P2.7 billion.