DMCI Holdings Inc., the listed firm of the Consunji group, has painted a challenging outlook for its businesses this year, saying growth will likely prove muted.
According to DMCI chairman Isidro A. Consunji, moderate global economic recovery, geopolitics and elevated domestic inflation, price volatility, high interest rates and the lingering impact of the Covid-10 pandemic are to tell on its performance this year.
“As we look ahead to 2023, we expect a blend of challenges for our business portfolio” he said.
DMCI and DMCI Homes, for instance. will continue to face headwinds as high interest rates and hybrid work models temper demand. Inflated raw material costs were seen eroding margins.
To navigate these challenges, Consunji said the business will explore new product formats such as leisure and premium offerings, employ value engineering techniques to identify cost efficient options and explore alternative business models such as joint ventures to optimize operations.
DMCI Power’s commissioning of plants in Palawan and Masbate this year will add to its power generation capacity and reinforce its leadership in the off-grid energy market.
Maynilad Water Services Inc., the West Zone concessionaire, already benefits from a five-year rate rebasing adjustment since January and should help push revenue growth.
“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 remains in discussion with the Department of Energy for the amendment of its coal operating contract in Semirara island and DMCI Mining has secure the needed environmental compliance certificates to more than double its nickel ore production in Zambales.
The enterprise is also securing auxiliary 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.
“Third, we 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 projects, but we hope to move forward on them by early next year,” Consunji said.
