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1
DMCI Holdings, Inc.
3/F, DACON Building
2281 Pasong Tamo Ext.
Makati 1231
Philippines
Dr. Victor Limlingan, Managing Director
April 2014
2
Disclaimer
• The information contained in this document is strictly
confidential. Neither DMCI Holdings, Inc. (DMCI), nor its
advisors make any representation regarding, and assumes no
responsibility or liability for, the accuracy or completeness of, or
any errors or omissions in any information contained herein.
Such information is subject to change without notice, its
accuracy is not guaranteed and it may not contain all material
information concerning DMCI.
• In addition, this document contains certain financial information
and results of operation, and may also contain certain
projections, plans, strategies, and objectives of DMCI, that are
not statements of historical fact which would be treated as
forward looking statements within the meaning of applicable
law. Forward looking statements are subject to risks and
uncertainties that may cause actual events and DMCI’s future
results to be materially different than expected or indicated by
such statements. No assurance can be given that the results
anticipated by DMCI, or indicated by any such forward looking
statements, will be achieved.
• This document is not an offer of securities for sale in the United
States. Securities may not be offered or sold in the United
States absent registration under the United States Securities
Act of 1933, as amended (the “Securities Act”) or an exemption
from such registration. This document is not an offer to sell
securities or a solicitation of an offer to buy securities in any
jurisdiction where such offer or sale is not permitted.
4
Contents
• History of DMCI
• The DMCI Group: Financials
• Portfolio Management
• Target Portfolio (5-year plan)
• Investors
5
• Founded in 1954, it is
acknowledged as one of the
leaders in the Philippine
construction industry
• Built more than 500 buildings &
structures (including national
landmarks)
• One of the first to use precast,
pre-stressed & high-strength
ready-mixed concrete
History of DMCI
6
David M. Consunji Founder
• “…building is not just an
occupation or even just a
profession, but a calling.
• Constructing honestly and well
is a task that combines huge
social value, enormous
technical challenges, and a
great ethical obligation to be fair
to clients and employees.”
7
Contents
• History of DMCI
• The DMCI Group: Financials
• Portfolio Management
• Target Portfolio (5-year plan)
• Investors
8
The DMCI Group: Subsidiaries
Listed subsidiaries NAV (Pm)* *April 2014, CLSA
Stakes
Semirara 67,830 56%
Unlisted subsidiaries
Maynilad Water 25,805 25%
DMCI Homes 49,299 100%
Construction 39,576 100%
DMCI Power 7,095 100%
DMCI Mining (ex - TMC)
2,552 100%
Toledo Mining 989 93%
ENK Plc Not available 100%
Total 180, 591
9
The DMCI Group: Net Income & NAV
Subsidiaries Net Income Php After Minority Interest, For the year ended
December 31, 2013 (In Mn Php)
NAV (Pm)* *April 2014, CLSA
% of 2013
Semirara &
Sem-Calaca 4,246 67,830 7%
(5% & 2%, respectively)
Maynilad Water (DMCI - MPIC)
1,915 25,805 7%
DMCI Homes (PDI)
2,655 49,299 5%
Construction (DMCI)
1,275 39,576 3%
DMCI Power (incl. TMC)
254 7,095 4%
DMCI Mining 169 3,472 5%
Total 18,937
(core net income plus one-time gain
on sale (P8,423 - Parent)
198,004 9.56%
10
The DMCI Group: Book Value vs Market Price
Listed subsidiaries NAV April 2014, CLSA
Book value (PhP) 2013
NAV/BK**
Semirara 67,830,000,000 20,127,511,704 3.37
Unlisted
subsidiaries
Maynilad Water 25,805,000,000 20,602,000,000 1.25
DMCI Homes 49,299,000,000 9,553,392,140 5.16
Construction 39,576,000,000 5,913,515,873 6.69
DMCI Power 7,095,000,000 876,092,267 8.10
DMCI Mining (ex - TMC)
2,552,000,000 2,950,434,040 0.86
Toledo Mining*** 989,000,000 1,760,395,000 0.48
ENK Plc Not available 2,124,623,030 -
Text
* Book value (as of 31 March 2013) for Toledo Mining converted from 27,903,108 British Pounds Sterling
** All figures are taken from the 2013 audited financial statements (with the exception of Toledo Mining); and NAV figures date to approximately
April 2014, CLSA
*** NAV based on Financial Statements
11
The DMCI Group: Net Income & Book Value
Subsidiaries Net Income Php
After Minority Interest, For the year ended
December 31, 2013 (In Mn Php)
Book value (PhP) 2012
% of 2013
Semirara & Sem-
Calaca 4,246 20,127,511,704 25%
(6% & 19%, respectively)
Maynilad Water (DMCI - MPIC)
1,915 20,602,000,000 11%
DMCI Homes (PDI)
2,655 9,553,392,140 28%
Construction (DMCI)
1,275 5,913,515,873 31%
DMCI Power (incl. TMC)
254 876,092,267 29%
DMCI Mining 169 2,950,434,040 15%
Total 18,937
(core net income plus one-time gain
on sale (P8,423 - Parent)
60,022,946,024 31%
12
Contents
• History of DMCI
• The DMCI Group: Financials
• Portfolio Management
• Target Portfolio (5-year plan)
• Investors
13
DMCI Holdings, Inc.: Portfolio
• Grow
• Develop
• Hold
A. Power (Sem-Calaca)
B. Construction
A. Coal (Semirara Mining)
B. Real Estate (DMCI Homes)
C. Maynilad Water
A. DMCI Mining (metal-mining)
B. DMCI Power (SPUG)
C. Infrastructure (as a proponent)
14
Power
Sem-Calaca: 1,000 MW
expansion in addition to existing
600 MW capacity. Phase 1:
ongoing construction of 2x150
MW plants (CFB). Phase 2:
planned construction of 2x350
MW plant (pulverized coal)
15
Construction Progress (1 of 2)
As of March 2014
94% 61% 100%
Boiler Steel Structure Main Powerhouse
Coal Yard
16
Construction Progress (2 of 2)
As of March 2014
94% 94%
94%
ESP Area
Chimney
Circulating Water Trench
17
Power (Sem-Calaca)
BEFORE 2009
Generation (GWh) 181
Revenue (Php Mn) 444
Net Income (PhP Mn) 59
Purchase Price (Php Mn)
100% owned by SCC 16, 290
AFTER 2012 2013
Generation (GWh) 2, 463 3,638
Revenue (Php Mn) 9, 700 14,760
Net Income (PhP Mn) 3, 280 5,780
NAV (Php Mn)* 64,600 64,600
* Based on CLSA estimated NAV (as of April 2014)
18
Awards ~ TPLEX, NAIA
Expressway & MRT 7;
Prospects ~ Metro Manila
Skyway, LRT 1 Ext. & CALA
Expressway; NLEX-SLEX
Connector Rd., LRT Line 2 East
Ext., & C-6 Skyway (Stage 4)
Construction
19
Award 1: TPLEX Tarlac-Pangasinan-La Union-Expressway 15B Php*
* 15B Php out of 20B Php total for the entire project
22
Award 4: NAIA Terminal 1 Rehab 1.3B Php
Construction Period: January 2014 – January 2015
Project inclusions: Architectural works, improvement of
mechanical, electrical and plumbing, and structural retrofitting
23
Award 5: NAIA Expressway At-Grade Works
849M Php
Construction of the Embankment and Utilities for the At-Grade Portion of
NAIA-X Project
Proponent: Entertainment City Estate Management Inc. (ECEMI)
At-Grade
Entertainment City
24
Award 6: Connector
Road (CITRA)* 25B Php
• Blue Segment = MPIC
• Red Segment = CITRA
• 5 km _Common Segment_
*No Photo Available:
Award 2: Embankment 3B PhP & Award 3: Terminal 1 2B Php
26
Prospects 2: Connector Road (MPIC) (ABOVE LEFT: blue segment)
Prospects 3: CALA Expressway (ABOVE RIGHT)
28
DMCI Holdings, Inc.: Portfolio
• Grow
• Develop
• Hold
A. Power (Sem-Calaca)
B. Construction
A. DMCI Mining (metal-mining)
B. DMCI Power (SPUG)
C. Infrastructure (as a proponent)
A. Coal (Semirara Mining)
B. Real Estate (DMCI Homes)
C. Maynilad Water
29
DMCI Mining
Improvement of operating
capacity of nickel assets (ENK &
TMC) underway. Long term
option is to use Direct Shipping
Ore to create capital to undertake
nickel processing of lateritic nickel
ore (<1.2% nickel ore)
30
Nickel Assets: ENK & Toledo
ENK TOLEDO
Interest 100% 96.04%
Location Acoje, Zambales Berong, Long Point & Moorsom,
Ipilan, Ulugan
Minerals
Acoje – 50.14 MT
@1.08% nickel
Zambales - 23.5 MT
@ 1.18% nickel
Berong – 8.84 MT @ 1.55% nickel
Long point & Moorsom – 120 MT
@ 1.27 nickel
Ipilan – 43.37 MT @ 1.20 nickel
31
DMCI Power
(SPUG)
Investing in off-grid areas &
delivering power at a competitive
price. Construction & operation of
coal-fired plants in order to
reduce cost or production to ~
Php 5.00/kWh. DMCI Power to
use 100% Semirara coal.
34
SPUG Power Plants 3:
15MW Bunker Power Plant
Oriental, Mindoro
Location : Calapan, Oriental Mindoro
Off-taker : Mindoro Electric Cooperative (ORMECO)
Supply Cont : 20 yrs. Power Supply Agreement with
Minimum Energy Off-take of 50.6GWh p.a.
Est. Proj. Cost : PhP 900M
36
DMCI Holdings, Inc.: Portfolio
• Grow
• Develop
• Hold
A. Power (Sem-Calaca)
B. Construction
A. Coal (Semirara Mining)
B. Real Estate (DMCI Homes)
C. Maynilad Water
A. DMCI Mining (metal-mining)
B. DMCI Power (SPUG)
C. Infrastructure (as a proponent)
38
Semirara (Coal Mining)
BEFORE 1996
Production (‘000 MT) 806
Revenue (Php Mn) 654
Net Income (PhP Mn) (2, 335)
FOB Price (Php Mn) 997
Purchase Price (Php Mn)
66% equity 672
AFTER 2012 2013
Production (‘000 MT) 7,657 7,861 ROM
Revenue (Php Mn) 14,450 12,573
Net Income (PhP Mn) Total Consoliated
3,088 1,800
FOB Price (Php Mn) 2,454 2,185
Market Value* (Php Mn)
56% equity 47, 082 53,346
*Based on Semirara’s Market Price as of December 2013
39
Semirara Island: Mines & Deposits
SILICA
LIMESTONE
BOBOG MINE
CLAY
PANIAN -COAL
HIMALIAN-COAL
UNONG-COAL
12 MILLION MT
DEPLETED
UNONG-COAL
12 MILLION MT
DEPLETED
LIMESTONE 1.0 BILLION TONS
Earlier Studies
AustroMineral Contractors, 1980 to 1985
Dames & Moore, 1982
Geomontan, 1990
Monenco Consultants Limited, 1990 Minarco Asia
Pacific Pty, Limited, 2004 Queensland Geological
Services Pty Ltd, 2006
Exploration by DMCI:
560 exploration and confirmatory holes, 2006 to
2011
* Coal resources & recoverable reserves estimates
certified by local competent persons
** Coal resources estimate certified by local
competent person, pending certification of
recoverable reserves estimate
*** Coal resources & recoverable reserves
estimates pending certification by local competent
persons
40
Real Estate
Our “Hold” approach in Real
Estate translates into modest
growth. Target 10% year-on-year
growth in sales from 2013 to
2014. Projected increase in 2013
to 2014 net income is also 10%.
41
Maynilad Water
After the partial sale of its stake in
Maynilad Water, DMCI Holdings
maintains or “holds” at 25%
ownership.
42
Water
BEFORE 2007
Billed Volume (mcm) 286
Revenue (Php Mn) 100%
7, 377
Net Income (PhP Mn) 100%
1, 666
NRW (%) 66.00
Purchase Price (Php Mn)
42% equity 3, 000
AFTER 2012 2013
Billed Volume (mcm) 428 444
Revenue (Php Mn) 100%
15,834 16,777
Net Income (PhP Mn) 100%
6,386 6,846
NRW (%) 43.47 38.71
Market Value (Php Mn)
34, 294 42% equity
21,192* 25% equity
* 25% Equity as of February 2013 after sale of 16% Interest to Marubeni for total amount of Php 13 billion
43
Arbitration: Maynilad’s stance
• Maynilad is a concessionaire of the Metropolitan Waterworks and Sewerage System (MWSS) given the exclusive right to manage water and wastewater operations in the West Zone of the Greater Manila Area as defined in the Concession Agreement (CA) entered into by both parties on 21 February 1997. Under the CA, a Rate Rebasing process is conducted every five years to determine the adjustment to be made to the tariff charged by Maynilad for the services it renders that will allow it to recover and earn a return on its expenditures. On 30 March 2012, Maynilad submitted a business plan for the determination of the adjustment to be applied to its standard rates for the period 2013 to 2017. On 12 September 2013, MWSS denied Maynilad’s petition for an upward adjustment of 28.35% of its average basic charge (or Php8.58 per cubic meter), and instead approved a negative adjustment of 4.82% (or Php1.46 per cubic meter), which Maynilad subsequently contested. On 4 October 2013, Maynilad filed a notice of dispute with the Secretariat of the International Chamber of Commerce (ICC) International Court of Arbitration to resolve its rebasing dispute with MWSS. Maynilad reviewed and took into consideration the MWSS determination as outlined in its September resolution and submitted an alternative proposal with a positive adjustment of 13.41% (or Php4.06 per cubic meter). The most significant element driving this alternative proposal is Maynilad’s position that corporate income tax should be a recoverable expenditure in tariff determination.
44
Contents
• History of DMCI
• The DMCI Group: Financials
• Portfolio Management
• Target Portfolio (5-year plan)
• Investors
45
DMCI Holdings, Inc. - Target Portfolio (2019)
Portfolio 2014 2019
Grow Power 25% 30%
Construction 25% 10%
Develop DMCI Mining 0% 10%
DMCI Power 0% 10%
Infrastructure 0% 10%
Hold Coal 15% 10%
Real Estate 20% 10%
Maynilad 15% 10%
47
2019 Target Portfolio ~
Power
Construction
DMCI Mining DMCI Power
Infrastructure
Coal
Real Estate
Maynilad
48
Contents
• History of DMCI
• The DMCI Group: Financials
• Portfolio Management
• Target Portfolio (5-year plan)
• Investors