DMCI Holdings sets P31-billion capex this year

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DMCI Holdings, Inc. is ramping up its capital expenditures (capex) to P31 billion this year, as it looks to support its property unit’s aggressive expansion in the following years.

The listed engineering and construction conglomerate is raising capital spending by 15% from the P27 billion it spent in 2018.

DMCI Holdings Chief Finance Officer Herbert M. Consunji said in a press briefing last week that bulk of the capex will go to DMCI Project Developers, Inc., which operates under the name DMCI Homes, at P18 billion.

Semirara Mining & Power Corp. (SMPC) cornered P10 billion, while off-grid energy developer DMCI Power Corp. will receive P1.3 billion, while the rest will go to its other units.

The Consunji-led firm’s other businesses include construction firm D.M. Consunji, Inc. and DMCI Mining Cop.

The allocation excludes the spending for DMCI Holdings affiliate, Maynilad Water Services, Inc.

DMCI Homes is set to launch a record number of project launches this year. Its properties are mostly mid- to high-rise condominium developments in Metro Manila, including Prisma and Fairlane Residences in Pasig City, Calathea Place and The Atherton in Parañaque City, as well as The Celandine and Infina Towers in Quezon City.

“For this year, our target reservation sales is P38 billion,” DMCI Homes Project Development Manager April B. Bernal said in a press briefing in Makati last week.

The company’s projects typically cater to the middle-class and upscale Filipino market.

In 2018, DMCI Homes delivered a net income of P3.9 billion, 9% higher year on year due to a one-time gain from the sale of land in Quezon City worth P715 million. Without this, its core profit fell by 11% due to the higher cost of raw materials, as well as the adoption of a new accounting standard that changed the recording of broker’s commissions.

Overall, DMCI Holdings saw its consolidated net income drop by 2% in 2018, as SMPC suffered a nearly eight-month shutdown in Unit 1 of Southwest Luzon Power Generation Corp.

Despite SMPC’s weakness, it remained to be the top contributor to DMCI Holding’s earnings last year at P6.8 billion, albeit lower than the P8 billion it generated in 2017.

Meanwhile, DM Consunji’s net income contribution to the parent rose 16% to P1.2 billion, due to the near completion of various projects. DMCI Power’s net earnings also grew 30% to P465 million, while DMCI Mining’s net income inched up 4% to P117 million due to higher shipment volumes for the year.

The company said it expects to have a better year in 2019.

Shares in DMCI Holdings were down by four centavos or 0.34% to close at P11.56 each at the stock exchange on Friday. — Arra B. Francia