Consunji-led diversified engineering conglomerate DMCI Holdings Inc. booked its highest ever core net income in 2021.
In a disclosure to the Philippine Stock Exchange on Tuesday, DMCI Holdings reported a core earning—profits derived from its core business excluding non-recurring gains and losses—of P17.4 billion, up 164% from P6.6 billion in 2020.
“Surging commodity prices, recovering electricity rates, and higher construction accomplishments accounted for the spectacular growth,” the company said.
Including a non-recurring income of P1 billion in 2021 mostly from deferred tax remeasurement under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law, which reduced corporate income tax from 30% to 25%, and non-recurring loss of P708 million mainly from sales cancellations for a real estate project in 2020, DMCI Holdings said its net income stood at P18.4 billion, up 214% from P5.9 billion.
“Nearly all of our subsidiaries grew triple digits in 2021 because of higher productivity and what we believe is the start of a commodities supercycle,” said DMCI Holdings chairman and president Isidro Consunji.
Commodities, or raw materials such as coal and nickel, are said to be in a supercycle when their prices trade above their long-term price over a prolonged period.
In 2021, Newcastle coal prices reached an all-time high of $269.50 in October while LME nickel hit a 10-year high of $22,145 in September.
“This year, we expect extreme volatility in coal and nickel prices because of the ongoing crisis in Ukraine, economic sanctions on Russian, and possible policy interventions of China and Indonesia,” said Consunji.
For the fourth quarter alone, DMCI Holdings posted a 145% rise in core earnings from P2 billion to P5 billion.
Meanwhile, net income climbed higher at 152% from P1.9 billion to P4.9 billion.
DMCI Holdings said its unit Semirara Mining and Power Corp. contributed P9.2 billion, a 360% upswing from P2 billion following a 16% increase in coal sales, 71% jump in average coal selling prices and 49%hike in average electricity selling prices.
Net income contributions from DMCI Homes grew 127% from P1.9 billion to P4.4 billion on higher revenue recognition from accelerated construction accomplishments, it added.
DMCI Mining, meanwhile, recorded a 150% boost in contributions from P483 million to P1.2 billion on record-high shipments of nearly 2 million wet metric tons and a 40% increase in average nickel selling prices.
Contributions from DMCI Power hit P580 million, an 8% uptick from P537 million due to the combined effect of higher electricity sales and lower fuel costs because of the commercial operation of its 15-megawatt Masbate thermal plant.
Likewise, D.M. Consunji Inc. grew its contributions to 247% from P109 million to P378 million owing to higher construction accomplishments and marginal pandemic-related expenses.
DMCI Holdings said that lower billed volume at -3% and average effective tariff at -1% because of COVID-19 restrictions translated to flat contributions from its affiliate Maynilad Water Services Inc. at P1.6 billion.—AOL, GMA News
DMCI Holdings core earnings hit record P17.4B in 2021, up 164%
Source: News Panda Philippines
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