Engineering conglomerate DMCI Holdings, Inc. recorded P9.2 billion in consolidated net earnings during the first nine months, a 6-percent year-on-year drop due to weak profit contributions from its real estate, nickel mining and water businesses. 

Excluding a one-time gain of P111 million from the sale of its 10% stake in Subic Water and Sewerage Company, core net income slipped 2 percent to P9.1 billion during the same period. 

Consolidated revenues from January to September were likewise flattish at P45.1 billion compared to P45.6 billion last year. 

“Our earnings results are in line with our forecast. Although our construction and energy businesses did well, the revenue recognition timing issue of DMCI Homes and the income tax holiday expiration of Maynilad significantly weighed down our consolidated results,” said DMCI Holdings Chairman and President Isidro A. Consunji. 

“The suspension of DMCI Mining’s two operating units also accounted for our sluggish earnings,” Consunji added. 

Higher Contributions

Net income contributions from Semirara Mining and Power Corporation surged 52% from P3.5 billion to P5.4 billion due to higher coal export sales and the commercial operations of Southwest Luzon Power Generation Corporation. 

D.M. Consunji, Inc. more than doubled its net income to P732 million from P361 million last year. The 103- percent growth was primarily related to the full recognition of cost overruns for a power plant in 2015. 

Off-grid energy unit DMCI Power Corporation booked a 12-percent profit increase to P342 million from P305 million, as a result of higher sales to electricity cooperatives in Calapan, Masbate and Palawan. 

Income Drags

DMCI Homes recognized a 63 percent drop in net income to P1 billion due to the deferred recognition of revenues from its completed high-rise projects, which normally take three to four years to complete. 

Contrary to local industry practice, the mid-range property developer realizes sales earnings only when the unit is fully completed and at least 15 percent of the contract price has been collected. 

Depressed nickel prices and the prolonged suspension of its mining units in Palawan and Zambales sparked a 91 percent drop in profitability for DMCI Mining Corporation. From P643 million, its net income plummeted to P59 million. 

Net income contributions from affiliate Maynilad Water Services dropped 11 percent from P1.7 billion to P1.5 billion. - 4 - Higher billed volume (4%), a 3 percent increase in average effective tariff and a non-recurring consolidated adjustment of P1 billion due to availment of the Optional Standard Deduction cushioned the impact of its income tax holiday expiration in 2015. 

DMCI Holdings and other investments income also dropped 6 percent to P58 million from P62 million due to reduced interest in Subic Water. From 40%, subsidiary DMCI Project Developers Inc. was left with a 30-percent interest after divesting its 10% stake in March this year.