Diversified engineering conglomerate DMCI Holdings, Inc. reported a 44 percent drop in consolidated net income to P5.9 billion last year from the P10.5 billion earned in 2019.
In a disclosure to the Philippine Stock Exchange, the firm said the decline was largely attributable to the strict quarantine restrictions and economic impacts of the COVID-19 pandemic.
Excluding non-recurring items in 2020 and 2019, core net income fell 47 percent year-on-year from P12.4 billion to P6.6 billion.
These consist of one-time losses of P1.9 billion mostly coming from one-time noncash goodwill impairment charge for its Zambales mining assets in 2019 and P708 million pertaining mainly to sales cancellations for a real estate project in 2020.
For the fourth quarter alone, consolidated earnings improved 59 percent from P1.2 billion to P1.9 billion owing to the absence of a one-time goodwill impairment loss.
Excluding non-recurring items, core net income in the last quarter stood at P2.1 billion, down 34 percent year-on-year from P3.1 billion.
“The community quarantines hit our construction productivity while weak market conditions dragged the sales performance of most of our businesses,” said DMCI Holdings Chairman and President Isidro A. Consunji.
He adde that, “DMCI Mining was able to beat the downtrend because of strong nickel demand from China amid the Indonesian nickel ore export ban. DMCI Power posted higher sales volume but its revenues fell due to the high base effect of the retroactive tariff adjustment for its Aborlan plant in 2019.”
Core income contribution from Semirara Mining and Power Corporation dropped 65 percent from P5.7 billion to P2 billion owing to double-digit declines in coal sales (-16 percent) and average selling prices for coal (-23 percent) and electricity (-32 percent).
DMCI Homes contributed P1.9 billion in core income, 36 percent lower year-on-year from P3 billion as the suspension of non-essential work in the first semester led to a slowdown in construction accomplishments which effectively lowered revenue recognition and unit turnovers. Higher construction costs also contributed to the earnings decline.
Affiliate Maynilad Water Services, Inc. accounted for P1.5 billion, a 13 percent decline from P1.8 billion in 2019 owing to lower commercial and industrial sales and higher depreciation and amortization for its water source and wastewater capital investments.
DMCI Power income declined 12 percent from P611 million to P537 million due to the absence of a one-time retroactive adjustment in Palawan’s non-fuel tariff amounting to P113 million recorded in 2019.
However, without the retroactive adjustment, its net income increased by 8 percent.
Core income share from DMCI Mining soared 165 percent from P182 million to P483 million following a 41-percent jump in nickel shipments and a 14 percent increase in average selling prices.
D.M. Consunji, Inc. recorded an 88 percent drop in earnings contribution from P906 million to P109 million mainly due to lower construction productivity and accomplishments because of the COVID-19 pandemic. DMCI Holdings and other investments realized a P51 million loss compared to a P223 million net income in 2019 owing to lower interest income and COVID-19 expenses.