DMCI Holdings Inc., the diversified conglomerate controlled by the Consunjis, expects a strong recovery this year due although a return to its pre-pandemic performance is not seen until 2023.
“We believe that our Company can stage a recovery this year on the back of higher construction productivity and better market conditions,” said DMCI Chairman Isidro A. Consunji during the firm’s annual stockholders’ meeting.
He noted though that, “a return to normality and pre-pandemic profitability is unlikely given what is happening in our country.”
“Considering the vaccine roll-out is only starting, it will probably end by the first quarter of next year. So, the side effects of this pandemic would probably end up at the end of 2022. So, pre-pandemic economic condition will probably begin in 2023,” Consunji explained.
Leading the trek towards recovery this year will be the firm’s construction, nickel and coal mining, and residential development businesses.
But, Consunji said that, “We also expect operational headwinds to persist for SMPC (Semirara Mining and Power Corporation and Maynilad (Water Services).” “This year, we expect a strong bounce-back from D.M. Consunji, Inc. given its substantial order book, additional workers and increased barracks capacity,” he said.
Consunji noted that, “Productivity is also higher because, unlike last year, essential and priority infrastructure projects are allowed to continue even during ECQ (enhanced community quarantine).”
DMCI’s construction unit also hopes to do even be better next year “if we win some of the big-ticket items in the Build, Build, Build Program of the government.”
“For Semirara, we will have a bounce-back this year because coal prices have gone up, but the prices of electricity are going to be down. And the projection is, it will probably remain low for the next two or three years,” Consunji said.
Thus, he said SMPC may not attain pre-pandemic profitability, but probably 75 percent of what it attained before.
Consunji said “the water seepages at Molave North Block 7 and protracted outage of Calaca Unit 2 will temper the company’s results.”
DMCI Mining will also continue growing its earnings “as long as the Indonesian ore ban continues, and today’s Chinese very bullish market, I hope it will stay buoyant.”
DMCI Homes will probably be back to its pre-pandemic level by 2023,” said Consunji adding that, “We expect DMCI Homes to do better this year because of its considerable unrecognized revenues, higher construction productivity and resource optimization efforts.”
“However, softening demand for mid-segment projects because of job insecurity and unemployment could negatively impact its profitability by 2023,” he said.
But DMCI Homes remains optimistic that its resort-type developments can sustain buyer interest amid work-from-home arrangements.
“As for Maynilad, a tariff freeze is likely to remain in place until December 31, 2022. And until a new contract is signed, it cannot make any long-term dividend commitments to its investors,” Consunji warned.
However, he said “Maynilad will be on-track by the end of this year because we are hopeful that the revised Concession Agreement will be shortly approved.”