DMCI Holdings, the diversified engineering conglomerate owned by the Consunji family, said it will reduce its 2020 capital expenditures by 52 percent to P19.4 billion from the original target of P40.4 billion amid the expected slowdown of businesses due to the pandemic.
DMCI chairman and president Isidro Consunji said during the virtual annual stockholders’ meeting he expected a marked slowdown in the company’s consolidated earnings this year, as the COVID-19 pandemic continued to drag down economic activities, market prices and workforce productivity.
“We expect weak demand and low selling prices to affect most of our businesses. DMCI [D.M. Consunji, Inc.] could show more resilience, if supported by massive public spending and timely issuance of permits and rights-of-way,” said Consuji.
“At this stage of the pandemic, we cannot predict how the business environment will evolve but it will definitely take some time before our company can rebound to its pre-pandemic income and dividend payout levels,” he said.
Consunji said to survive the current crisis, the group was deferring their capital spending to boost liquidity and keep balance sheets healthy.
He said the group’s real estate business under DMCI Homes would sustain the deepest budget cut as its capital expenditures would be reduced to P14 billion from P31 billion. It will also defer some of its land acquisitions.
DMCI Holdings had consolidated cash and cash equivalents of P14 billion and P52.6 billion in consolidated debts as of end-June. About P14.6 billion of its total debt will mature in the next 12 months.
Consunji said that in the event of a protracted economic recovery, DMCI Homes and Semirara Mining and Power Corp., which account for the bulk of the consolidated debt, would have P53 billion in unused credit lines to tide them over.
“We are debt-free at the parent level, which gives us the flexibility and financial standing to tap credit facilities and funding sources, if needed,” he said.
Consunji said he was confident that the company would survive the pandemic, which is the third historic crisis in the company’s history, after the 1997 Asian financial crisis and the 2008 global financial crisis.