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Business

DMCI hikes capex to P59 billion this year

Richmond Mercurio - The Philippine Star

MANILA, Philippines — The DMCI Group of the Consunji family is raising its capital spending by nearly a quarter to P59.1 billion this year, with the majority of its businesses allocating higher investments to support their respective expansions.

West Zone concessionaire Maynilad Water Services Inc. is earmarking P31 billion for 2024, the biggest capital investment for the company since the 1997 privatization of water services in Metro Manila.

The amount will be used by Maynilad to meet its water and wastewater service obligations this year.

Excluding Maynilad, the DMCI Group capex for 2024 is expected to grow by 29 percent to P27.7 billion this year from P21.5 billion previously.

“This growth is attributed to a series of strategic initiatives, including re-fleeting and exploration activities in the coal and nickel businesses, the construction of a 2x8-megawatt bunker power plant in Palawan, wind power projects on Semirara Island and the completion of ongoing DMCI Homes projects,” DMCI said.

DMCI Homes, the property arm, has set its capex for this year at P17 billion, up seven percent from last year’s P15.9 billion.

Integrated energy company Semirara Mining and Power Corp. is also hiking its capex by 75 percent to P7 billion from P4 billion in 2023.

Off-grid electricity generator DMCI Power is allocating P2.3 billion, a 156 percent increase from last year’s P900 million.

DMCI Mining, for its part, will also get a significant jump in its capex this year at P1.1 billion from P300 million last year.

The DMCI Group is setting its sights on strategic investments such as renewable energy, leisure properties and joint ventures in its core businesses to diversify its revenue streams and address changing consumer preferences.

The group said it expects market conditions for 2024 to be challenging as slowing global economic growth, particularly in China, could dampen demand, and ultimately the commodity prices, for coal and nickel.

“Elevated interest rates and high inventories will keep construction and real estate demand subdued, as buyers and developers adopt a more cautious approach in their investment decisions,” DMCI said.

“Utilities, specifically power and water, should benefit from a controlled inflation rate and a gradual stabilization in fuel and raw material costs, which can strengthen operating profit margins,” it added.

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