Diversified conglomerate DMCI Holdings Inc. sees “muted” growth this year, citing several challenges that might affect its business portfolio.
“As we look ahead to 2023, we expect a blend of challenges for our business portfolio because of moderate global economic recovery, persisting geopolitical tensions, and elevated domestic inflation,” DMCI chairman and chief executive officer Isidro Consunji said during the company’s annual stockholders meeting on Wednesday.
The company’s net income reached PHP31.1 billion last year.
The top contributors were Semirara Mining and Power Corporation (SMPC), DMCI Homes, and Maynilad. Consunji said that for this year, “price volatility, cost inflation, high-interest rates, and the lingering impacts of the pandemic should affect some of our businesses.”
The International Monetary Fund (IMF) earlier projected global economic growth to soften to 2.8 percent this year from 3.4 percent in 2022.
The country’s headline inflation meanwhile settled at 6.6 percent in April, down from a high of more than 8 percent in January this year but still above the government’s 2-4 percent target.
Due to high inflation, the central bank has raised key policy rates by a total of 425 basis points since May last year.
Consunji said however that despite these challenges, DMCI sees bright spots in the power and water businesses which he said, would benefit from recovering consumption and better prices.
“DMCI Power is set to expand with the commissioning of additional plants in Palawan and Masbate this year. These developments will contribute to our power generation capacity, reinforcing our leadership position in the off-grid energy market,” Consunji said.
He added that the five-year rate rebasing adjustment which began in January 2023, is also expected to drive the revenue growth and capex spending of Maynilad.
“All these considered, our company’s growth in 2023 will likely be muted, but I remain optimistic about our ability to adapt and persevere,” said Consunji.
Consunji said in the next couple of years, DMCI Power Corporation and DMCI Mining are expected to post higher growth than the rest of DMCI’s businesses.
DMCI Mining recently secured Environmental Compliance Certificates to double its nickel ore production in Zambales.
It is also in the process of securing the needed permits to ramp up production and operate new mines by early next year.
For DMCI Power, Consunji said the shortage of electricity supply in the provinces of Palawan, Mindoro, and Masbate could also provide opportunities for growth.
“I believe that DMCI Power is in a very good position to be able to fill these gaps in supply in these islands we are currently operating. So I’m very confident the two companies will grow faster than the rest of the other companies in our portfolio,” he said.
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