Sales cancellations in a DMCI Homes project in Davao City plus depreciation expense in its two power plants led to a disastrous drop in earnings of DMCI Holdings, Inc., a huge 78 % drop from P2.7 billion to P616 million for the first quarter this year.

In a disclosure to the Philippine Stock Exchange (PSE) today, the conglomerate said that all its businesses delivered weak performances during the period.

“Our consolidated results were weighted down by operational headwinds, low market prices and the initial effects of the enhanced community quarantine (ECQ),” said DMCI Holdings chairman and president Isidro A. Consunji.

“We expect the succeeding quarters to be even more challenging because of the full impact of the coronavirus containment measures,” he added.

Core net income contributions from Semirara Mining and Power Corporation contracted 51 percent from P1.3 billion to P623 million owing to a 16 percent drop in average coal prices and a 27 percent drop in average electricity prices.

DMCI Homes fell into negative territory following a slowdown in revenue recognition due to timing of collections and lower construction accomplishments as a result of the ECQ, as well as the increase in construction costs related to the dress-up of units completed in prior years. From a net income of P481 million, it recorded a first-quarter core net loss of P197 million.

Lower margins for a number of projects, higher depreciation and productivity losses due to the ECQ resulted in a 53 percent reduction in net income contribution from D.M. Consunji, Inc., from P359 million to P170 million.