DMCI expects muted growth in 2023

DMCI Holdings Inc. is cautiously optimistic about its prospects this year as it expects “a blend of challenges for our business portfolio because of moderate global economic recovery, persisting geopolitical tensions, and elevated domestic inflation.”

DMCI Isidro A. Consunji.jpeg
DMCI Chairman Isidro A. Consunji

During the firm’s annual stockholders’ meeting, DMCI Chairman Isidro A. Consunji added that, “our company’s growth in 2023 will likely be muted, but I remain optimistic about our ability to adapt and persevere.”

“Our diverse portfolio, sound financial position, and commitment to operational excellence give us a strong foundation to navigate the volatile business environment and continue delivering value,” he noted.

Consunji acknowledged that, “Price volatility, cost inflation, high interest rates, and the lingering impacts of the pandemic should affect some of our businesses.”

“However, we also see bright spots in the power and water businesses, which should benefit from recovering consumption and better prices,” he added.

To counter price volatility, Semirara Power and Mining Corporation and DMCI Mining will focus on optimizing their production while reining in costs.

Consunji disclosed that DMCI Mining has secured the needed Environmental Compliance Certificates to more than double its nickel ore production in Zambales.

“The company is in the process of securing the needed auxiliary permits to ramp up production and operate the new mines by early next year. With these developments, we can start shipping more and higher grade nickel ore in 2024,” he noted.

Construction unit D.M. Consunji and DMCI Homes are expected to face headwinds as high interest rates and hybrid work models temper demand. Inflated raw materials cost could also erode their margins.

“To navigate these challenges, we will explore new product formats, such as leisure and premium offerings. We will also employ value engineering techniques to identify cost-efficient options, while exploring alternative business models, such as joint ventures, to further optimize our operations,” said Consunji.

Meanwhile, the diversified engineering conglomerate plans to construct wind and solar facilities in Semirara Island through its renewable energy arm, DMCI Power.

“Our goal is to secure a long-term power supply agreement with the local electric cooperative, which will lead to reduced generation costs and more competitive tariffs for the island-residents,” he said.

However, no firm timeline has been set for these renewable energy projects, but DMCI hopes to move forward on them by early next year.

DMCI Power is also set to expand with the commissioning of additional plants in Palawan and Masbate this year. These developments will contribute to its power generation capacity, reinforcing its leadership position in the off-grid energy market.

Maynilad Water Services, on the other hand, is already benefitting from the five-year rate rebasing adjustment which began in January 2023. These adjustments should drive revenue growth and capex spending of P150 billion in the West Zone.