Consunji-led DMCI Holdings Inc. said lingering challenges to the economy would weigh on the financial performance of the company this year.
DMCI Chairman Isidro A. Consunji said the factors that will mute growth are the moderate global economic recovery, “persisting geopolitics of vengeance,” elevated domestic inflation, price volatility, high interest rates and the lingering effects of the Covid-19 pandemic.
“As we look ahead to 2023 we expect a blend of challenges for our business portfolio. DMCI and DMCI homes will continue to face headwinds as high interest rates and hybrid work models temper demand. Inflated raw material costs but also erode their margin,” Consunji said.
“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.”
The conglomerate reported in March that its net income in 2022 surged to an all-time high of P31.1 billion, a 69 percent increase from the previous year’s P18.4 billion, mainly on the spike in the prices of commodities.
Consolidated revenues climbed 32 percent to P142.6 billion from P108.3 billion as a result of higher coal and electricity prices.
Consolidated core net income rose 80 percent to P31.2 billion from P17.4 billion.
DMCI Power, meanwhile, is set to expand with the commissioning of additional plants in Palawan and Masbate this year. These developments will contribute to the company’s power generation capacity.
Consunji said Maynilad Water Services Inc., the West Zone concessionaire, is already benefiting from a 5-year rate rebasing adjustment since January, which should drive revenue growth and capital expenditure
“All this considered, 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,” Consunji said.
DMCI is in continuous discussions with the Department of Energy for a possible amendment of its coal operating contract in Semirara island.
For DMCI Mining, it was able to secure the needed environmental compliance certificates to more than double its nickel ore production in Zambales.
DMCI Mining is in the process of securing the needed auxillary permits to ramp up production and upgrade the new mines by early next year, according to Consunji.
“With these developments, we can start shipping more and higher grade nickel ore in 2024,” Consunji said.
“We [also] plan to construct wind and solar facilities in Semirara island for our 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 tariff for the island residents. No firm timeline has been set for these RE [renewable energy] projects, but we hope to move forward on them by early next year.”
