Decrease in Net Income
DMCI Holdings, Inc., a firm led by Consunji, reported a decline in consolidated net income of 27% to P10.5 billion in 2019. The decrease was due to the lower contributions of its coal mining and power unit and one-time goodwill impairment charge for mining investment. According to the company, its core net income likewise dropped by 14% to P12.4 billion. This was excluded of the non-recurring loss of P1.9 billion, which came from the non-cash goodwill impairment. Let’s take a peek at other figures earned and lost by DMCI in 2019.
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4Th Quarter Figures
The company also reported that during the fourth quarter alone, its consolidated earnings decreased by 70% to P1.2 billion, which was caused by the 47% reductions in earnings from its Power Corp. (SMPC) and Semirara Mining. There was also a non-cash goodwill impairment charged to the company with P1.6 billion for Zambales Chromite Mining Co. (ZCMC) and Zambales Diversified Metals Corp. (ZDMC). The write-off of the goodwill connected to ZCMC and ZDMC was done since the company felt that the market conditions and regulatory restrictions no longer support DMCI’s original valuation of these investments. If non-recurring items were to be excluded, the core net income of the company could have been 25% lower to P3.1 billion.
About ZCMC and ZDMC
According to DMCI, ZCMC became idle in 2019 due to the lack of permits for it to start operating. ZDMC likewise made it impossible to do full commercial production because it lacked ancillary permits in other areas. The company bought these two firms in 2014 during the time when mid-grade nickel prices averaged $49. The average selling price of mid-grade nickel in 2019 dived by 45% to $27. This reduced the saleable resources of nickel.
Other Business Segments
D.M. Consunji, Inc. said that its net income slumped by 25% to P906 million with lacked significant realized claims and savings from the almost completed projects. As opposed to the loss of this business segment, DMCI Power Corporation reported a net income increase of 31% by P611 million because of the P1.13 adjustment per kilowatt-hour on its non-fuel tariff for its Aborlan power plant located in Palawan. DCMI Mining, on the other hand, claimed a rise in core earnings by 56% to P182 million because of the 82% rise in nickel shipment. Contribution from DMCI Holdings and other investments of the group dropped by 6% to P223 million because of the decline in interest income.
