DMCI (DMC) Holdings Incorporated’s key units performed better in Q1 2021 than during the pre-pandemic Q1 2019.
DMCI Homes becomes the leading net income contributor for DMC in the first quarter of 2021. It even surpassed the coal and power generating unit, Semirara Mining and Power, in net income. The Q1 2021 net income of DMCI Homes was 3.3X times than the net income it earned in the pre-pandemic Q1 2019.
Home sales is boosted by the prevailing low interest rate regime. DMCI Homes has been able to take advantage of the prevailing low interest rate regime. A low interest rate regime lowers the monthly amortization of residential loans placing the residential units within reach by a wider group of people. The low interest rate spurs demand for DMCI Homes’ residential development projects. A lower interest rate is likely to continue for longer as the BSP Governnor announced that the BSP will continue to support the economy as long as necessary.
Aside from the significant increase in the contribution of DMCI Homes, other units like the DMCI Mining also made signficant increase in net income contribution. Net income for DMCI Mining in Q1 2021 was 4X times that it was in Q1 2019. The commodity boom from the elevated global commodity demand is propelling the increased in revenue and net income of DMCI Mining.
Even the main net income contributor Semirara Mining and Power is experiencing net income improvements. Q1 2021 net income was 1.6 Billion Pesos as compared to the pre-pandemic Q1 2019 of 1.3 Billion Pesos.
Present global and local development could provide DMC a windfall. Presently it is trading at a dividend yield of 7.73%. The windfall may result to a bigger dividend in the coming periods.
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