Good afternoon, everyone. Thank you for joining us for DMCI Holdings analyst briefing. My name is Hannah Chan from Investor Relations, and I'll be taking you through a short presentation of group's financial and operational performance for the first quarter of 2026. We'll leave more time toward the end for the Q&A. Joining us today are members of the DMCI group's top management team, as shown on your screen, led by our Chairman and President, Mr. Isidro A. Consunji, and our Executive Vice President and Chief Finance Officer, Mr. Herbert M. Consunji. Before we begin, just a few reminders. This session is being recorded. Questions may be sent through the panelist chat box, and we'll prioritize questions submitted in advance, but we'll try to cover as many as possible during the session.
Management may also make some forward-looking statements during the discussion. They are based on current assumptions and expectations, and actual results may differ due to various risks and uncertainties. With that, let's begin. In the first quarter, the DMCI group delivered PHP 4.9 billion in earnings, down only 2% from PHP 5 billion in the same period last year. Softer contributions from SMPC and the dilution of our effective ownership in Maynilad were largely offset by improved contributions from our real estate, nickel mining, off-grid power, and cement businesses. Following Maynilad's IPO last November 7, our effective ownership declined from 25% to 18%, although this was partly cushioned by the water business improved operating performance. Meanwhile, Concreat significantly narrowed its losses as integration initiatives progress. Overall, the quarter reflects a broader and more balanced earnings contribution across the group.
That broader earnings mix also helped keep our margins and returns relatively steady during the quarter. While revenues were slightly lower, operating discipline and improved efficiencies across several businesses helped offset the impact. As a result, EBITDA and net income margins remained stable at 35% and 20% respectively. The group's balance sheet also remained healthy during the quarter. Total assets grew by 2% mainly due to higher cash balances, receivables, and contract assets. Debt increased modestly following SMPC's loan availment, although our leverage and liquidity ratios remained at comfortable levels. Yesterday, the board also approved a regular cash dividend of PHP 0.30 per share, or around PHP 4 billion in total payout.
This represents 27% of our 2025 core net income of nearly PHP 15 billion, in line with our 25% dividend policy and the board's approach of returning excess cash to shareholders while continuing to support the funding requirements of the business. Turning to the standalone results of our key businesses. Let me start with construction. D.M. Consunji, Inc.'s standalone net income reached PHP 81 million during the quarter as project delays and lower accomplishments across several accounts continued to weigh on results, particularly with some major infrastructure projects nearing completion, while the subway projects are still ramping up. As a result, revenues declined by 19% during the period. Even so, margins remained relatively stable as costs moved broadly in line with top line. Importantly, the business continues to maintain strong financial flexibility, ending the quarter in net cash and 0 debt position.
In the current environment, this provides the company with greater flexibility to pursue selective project opportunities while maintaining a light balance sheet. Looking at the order book, the project mix continues to shift toward large transport joint ventures as some standalone infrastructure projects near completion. During the quarter, the building segment remains the largest revenue contributor, although joint venture projects continue to gain share, supported by improved progress in the Metro Manila subway projects. We also secured a new joint venture project during the quarter, the MMSP Contract Package 109, in joint venture with Taisei Corporation, covering the NAIA Terminal 3 station and the connecting tunnels. Moving to real estate. DMCI Homes delivered another steady quarter, with net income increasing by 3% to PHP 1.3 billion. Higher revenues were mainly driven by lower cancellation reversals and stronger accomplishments from ongoing projects.
Meanwhile, recurring income from rentals and other income continued to support results. At the same time, the company continued to deleverage during the quarter, with net debt to equity ratio improving to 54% following PHP 3.2 billion in debt repayments. This continues to position the business well amid a challenging and potentially higher interest rate environment. On the operating side, market conditions remained soft, which continued to affect overall sales and reservations during the quarter. Encouragingly, we continue to see better traction in our ready for occupancy or RFO units, with RFO sales growing by 10% to PHP 3.2 billion following intensified marketing efforts. Rent-to-own demand also remains strong, with sales value under the program jumping 78% to PHP 16.5 billion.
This helps us capture potential future buyers who want their lease terms and over the next two to three years, following an additional pipeline for future sales and revenues on top of our existing unbooked revenues. In the meantime, rental income also helps support liquidity and offset carrying costs associated with RFO inventory. Last March, we also launched the One South Drive located in Baguio City, and where DMCI Homes serves as development manager, leveraging its residential development expertise. Under this setup, DMCI Homes earns construction and management fee revenues while still ensuring the project meeting its development standards. Overall, our unbooked revenues remain healthy and continue to provide over three years of revenue visibility. Moving to integrated energy.
SMPC reported net income of PHP 3.8 billion for the quarter, down 12% from last year, mainly due to lower coal shipments and reduced power generation. As a result, revenues declined by 7% during the period. Even so, operating costs also eased, reflecting lower direct costs and stable operating expenses. Core EBITDA margin remained healthy at 41%, while the business continued to maintain a solid balance sheet. During the quarter, as mentioned earlier, SMPC availed of a PHP 5 billion loan facility, mainly as a buffer amid elevated fuel costs. Even with the additional borrowings, leverage remains manageable at 26% debt- to- equity, while liquidity stayed strong at a current ratio of 4.3.
On the operating side, in the coal mining side, production increased during the quarter due to improved mine access in Narra, supporting higher output and lower strip ratio as the mine approaches depletion. Shipments were slightly lower due to weaker exports, although domestic third-party sales remained healthy. Average selling prices were relatively stable despite lower grade coal mix. Importantly, the higher production allowed us to rebuild the inventories and improve the availability of commercial grade coal. On the power side, plant availability declined during the quarter, mainly due to the continued outage of SCPC Unit 1 , along with maintenance activities at SLPGC. Despite this, average capacity improved following the uprating of SCPC and reduced generation at SLPGC. We also saw a stronger contracted sales mix during the quarter, with contracted volumes accounting for a bigger share of total sales, helping support average selling prices.
As of March 31, contracted capacity stood at around 49% of our 860 MW dependable capacity. Now, moving to off-grid power. DMCI Power delivered another milestone quarter, posting its best ever quarterly earnings, with net income growing by 56% to PHP 423 million. The strong performance was mainly driven by higher energy sales from recent capacity expansions. At the same time, operating costs declined due to lower fuel costs, particularly from the thermal and wind segments, as well as improved plant utilization, resulting in significant improvements in margins. The company also continued to invest in future growth, with capital spending increasing nearly threefold to support ongoing expansion projects and plant maintenance activities.
On the operating side, DMCI Power added around nearly 37 MW of capacity over the past year, following the commissioning of the Masbate expansion plant, the Palawan expansion in Aborlan, and the Semirara Wind Project. This helped drive double-digit growth in energy sales, particularly in Palawan, where demand remains strong. In Oriental Mindoro, however, sales declined due to higher renewable energy availability in the area, as well as limited operations following the transformer outage that lasted until March this year. Overall, average selling prices softened, mainly due to lower thermal fuel costs during the quarter, which also helped ease power costs for the communities that we serve, particularly amid the elevated diesel and bunker fuel prices. Moving on to nickel mining. DMCI Mining posted an 18% increase in net income to PHP 463 million during the quarter.
The improvement was mainly driven by higher shipment volumes following increased operating activity and new contributions from the Long Point mine, which started commercial operations in March. Selling prices softened due to the lower nickel grade sold during the period as the company took advantage of improved market conditions to sell more lower-grade ore. At the same time, operating expenses increased due to higher excise taxes, royalties, environmental expenditures, and pre-operating costs related to the Long Point mine, alongside the effectivity of the Enhanced Fiscal Mining Regime last February 17. Even so, net income margins remained steady at 28% during the quarter. On the operating side, production and shipments both improved during the quarter, supported by the start of the commercial operations at Long Point and the continued ramp up at ZCMC. What also helped was the stronger market environment.
This allowed us to sell more lower-grade ore that would have been difficult to move under a weaker pricing conditions. At the same time, the Philippine FOB prices for mid-grade nickel ore rose significantly, supported by stronger Asian demand and expectations of tighter Indonesian ore supply. Finally, moving to cement. We are encouraged by the continued improvement in Concreat's operating performance during the quarter. Revenues grew by 33% on significantly higher sales volume, supported by the additional capacity from the Solid Cement expansion that completed last year, and the low base effect due to APO supply disruption we experienced also last year. More importantly, operating efficiencies continued to improve. Cash cost per ton declined by 8%, benefiting from lower raw material, energy, and logistics costs.
As a result, losses narrowed significantly during the quarter, while core EBITDA turned positive, an encouraging sign that the foundations laid over the past year is beginning to translate into better operating results. On the operating side, the foundational work laid over the past year continued to translate into better plant performance and higher output during the quarter. Installed capacity followed the addition of a new Solid Cement capacity, while APO operations also normalized after last year's raw material supply disruption. This helped drive double-digit growth in production alongside a 33% increase in cement sales volumes during the quarter. Cement prices continued remaining softer during the period, in line with the broader market conditions and intense industry competition. Even so, the improvement in operating conditions and volumes gives us confidence that the recovery efforts are moving in the right direction.
In the interest of time, and since Maynilad already conducted its briefing last week, we'll no longer discuss the water business in detail. The key metrics are included in the annex portion of the presentation. To summarize, while market conditions remain uneven across our businesses, the quarter also highlights how earnings base continues to broaden across the portfolio. Construction and integrated energy faced softer conditions during the quarter, while real estate continued to benefit from de-leveraging and the improving RFO traction. Off-Grid Power delivered record earnings, and nickel mining benefited from stronger operating activity and market conditions, while recovery efforts in cement continue to gain ground. Across our businesses, one common denominator remains the strength of our balance sheets. This continues to give the group flexibility to navigate difficult market cycles, pursue opportunities selectively, and continue investing for the long-term growth.
Looking ahead, we expect conditions across the portfolio to remain mixed in the near term amid evolving fuel costs, interest rates, and varying market conditions across the group's businesses. That said, healthy cash flows, manageable debt levels, and disciplined capital management continue to provide the group with financial flexibility moving forward. For construction, DMCI continues to reposition its project mix toward large transport joint ventures, such as the Metro Manila Subway, while remaining disciplined in bidding and adapting to evolving opportunities and market conditions. In real estate, DMCI Homes remains focused on moving RFO inventory through rent-to-own programs, flexible payment terms, and international sales network. While market conditions remain challenging, management remains confident that the strong underlying demand for housing, together with the value for money proposition, quality development, and overall customer experience, will continue to help the business navigate the market well.
For integrated energy, SMPC remains focused on operational readiness, production continuity, and preparations for the upcoming Semirara coal operating contract bidding process. Alongside the ongoing transition from Narra mine to Acacia mine and the expiry of Narra's income tax holiday this month. Meanwhile, DMCI Power continues to pursue growth opportunities in underserved areas with around 44 MW of additional capacity targeted this year. Alongside the recently awarded 17 MW Occidental Mindoro project. At DMCI Mining, the company continues to benefit from stronger nickel demand in Asia, supported by the Long Point mine and ZCMC mine, while also preparing for the eventual depletion of ZDMC. Lastly, in cement, Concreat continues to build on the operational foundation laid over the past year, with the focus now shifting toward improving profitability through higher sales, better plant re-reliability, and greater operating efficiencies.
With this ends my presentation, to open the floor to questions, let's start off the questions we received in advance. Let's start with questions, addressed to DMCI. With us this afternoon is Mr. Jorge A. Consunji, President, Mr. Joffrey Gacula, Managing Director, JYC Lock, Special Assistant to the President. The first two questions are addressed to JBG. Hi, sir. First question. What drove the lower completions? Have ODA Funded Projects also been affected, what do you think needs to happen for a recovery to ensue?
Good afternoon. The lower year-on-year accomplishments were generally affected by fewer projects following completion of major infrastructure projects. Yes, the ODA Funded Projects have also been affected, primarily due to right of way issues and some technical issues on some projects. We expect improvement of the handover of right of way and resolution of technical issues soon to help recover and improve our performance.
Thank you, sir. Sir, next question po. Do you think you can still keep your clients even after declaring force majeure?
We issued notices to our clients to inform them on the effect of military strike risk. This is for us to start discussion with the owner to mitigate additional costs from both parties moving forward. So far, this is well received by our clients.
Okay. Thank you po, sir. The next two questions are addressed to sir JYL. Hi, sir. First question po. Are project biddings also affected by the weak macro backdrop?
Hi, Hannah. Good afternoon, everybody. Yes. For the private sector, the geopolitical challenges brought about by this Iran war resulted to price volatility and uncertainty, especially for fuel, especially with fuel affecting material prices. Due to this, most owners deferred project biddings and awards.
Okay, po, sir. Sir, next po, could you provide revenue and profit guidance for the year?
Given the current market conditions, we'll be recalibrating our financial targets for the remainder of the year. However, we are still pursuing other prospect projects that cannot be deferred, such as schools, hospitals, and utility projects. That will hopefully improve our financial performance for the rest of the year.
Okay. Thank you [Non-English content ] to the DMCI team for patiently answering our questions. Now we move on to questions addressed to DMCI Homes. For this afternoon, we have Mr. Freddy Austria, President, and Ms. Vanjie Atchioco, CFO. The first question addressed to ma'am EHA. Hi, ma'am EHA. Can you provide more color on the improvement in revenue bookings? How much of the growth can be attributed to RFO sales vis-à-vis project completion or lower reversals?
Hi, Hannah. Good afternoon, everyone. For the revenue that we've recognized for the prior periods, we book an additional 24% or an increase of 24% compared last year, while the contributions from the newly qualified accounts declined by 11%. However, our revenue reversals due to cancellation significantly decreased by 56%, which has led to the improvement in our revenue recognition for this period. Thank you.
Thank you po, ma'am. The next questions are addressed to sir ARA. Hi, sir. Good afternoon. The question goes, can you please provide more color on the lower cancellations for residential? What brought to this about given that cancellations for other companies seem to be elevated?
Yes, good afternoon, everyone. We experienced lower cancellations for the first quarter. I think this is mainly due to the fact that we did not have any RFO during the first quarter and also during the last quarter of 2025. This is because when projects are being completed, the buyers, or some of the buyers find it difficult to continue with the purchase of the unit. Some are not able to get bank financing. Some of them decide to back out. Since there were no RFOs during the first quarter, then I think the cancellations were lower.
On top of this, it's also because I think the reason why our cancellations are lower if you compare it to other developers is because we've always been more focused on the end user market, no, not the investor market.
Thank you, sir. Thank you, sir. Next question po, what is your unsold inventory as of the first quarter of 2026, and how does this compare with the end of 2025 levels?
Okay. Our unsold RFO inventory as of March 31 is PHP 21 billion, which is 14% lower than December 2025 RFO inventory level, which is PHP 24.8 billion.
Thank you, sir. Sir, last question po. Can you provide revenue and profit guidance for the year and for next year?
For 2026, we expect around 15% increase in income as compared to 2025. For 2027, it's. Well, we still cannot determine that. Still, subject to a lot of factors that are beyond our control. We don't know yet.
Okay. Thank you. Thank you so much, sir ARA and ma'am EHA for the very generous answers po. We move on to questions for Semirara. We have one question addressed to SMPC. With us this afternoon is Ms. Cristina C. Gotianun, President and COO of SMPC, and Carla Levina, Vice President and CFO. Hi, ma'ams. The question goes, what is the duration of Narra and Acacia mines tax holiday?
Good afternoon, everyone. For Narra mine income tax holiday, that is for a total of six years. That is inclusive of the four-year regular income tax holiday plus two bonus years. For Acacia mine, there's none yet, and it will all depend on the Strategic Investment Priority Plan that was issued by the BOI. Thank you.
Thank you. Thank you so much, po. We move now to questions addressed to DMCI Power. For DMCI Power, we have Mr. Antonino E. Gatdula, Jr., President. Good afternoon, sir. First question, po. What was your overall plant availability factor in the first quarter of 2026, and how does this compare with the same period last year?
Good afternoon to everyone. Overall plant availability factor improved from 89% to 97%, attributable to, of course, reliable operations across all sites. Full quarter availability of our wind facility in Semirara and the deferment of the scheduled maintenance for our thermal plants in Palawan and Masbate to reduce utilization of diesel for replacing power.
Okay. Thank you, sir. Sir, next po, do you see the EBITDA expansion sustaining throughout the year?
With the implementation of our new power supply contracts in Palawan and Oriental Mindoro, 15 MW for Palawan, 5 MW in Oriental Mindoro, plus the implementation or operation of our expansion plant in Masbate, that's 8 MW bunker. Barring any significant weather-related disruptions, we are optimistic that we can sustain our high EBITDA for 2026.
Thank you, sir. Sir, last question po. Given the sharp rise in energy prices, which are largely passed through costs, have you seen any signs of demand softening in the second quarter so far, relative to the 15% growth recorded in the first quarter? Could this also lead to pressure on receivables collections?
Based on our observations, our actual energy sales volume for the month of April grew by 8% despite increasing energy prices. As far as the receivables collections, the government's recent order on payment deferment may impact collections, collection efforts of all generation companies.
Okay, po, sir. Thank you, po, for the guidance. Now we move to DMCI Mining. We received quite a lot of questions for DMCI Mining. The questions are addressed to Mr. Tulsi Das Reyes, President. Hi, sir. TDCR. The first question goes, the growth for mining of 8% seems low given the jump in nickel prices. Were margins affected by higher fuel prices? What would the Q1 have been if fuel prices were stable, and what does this mean for the balance of the year?
Hi, Hannah. Good afternoon, everyone. Just to reiterate what Hannah said earlier, we made a conscious effort to sell the unmarketable grade at Zambales before. You're looking at 1.15 and 1.2. Had the market not improved to these high prices, we would not have been able to sell that, and we sold it for some good prices. We took advantage of that environment. Now, in terms of the fuel, there was really no effect on our Q1 sales. It did not bring down our margins. You have to understand that Long Point only ships out two shipments, a high iron grade and a 1.3 grade. If you average that out, the nickel grade is not so high. We're expecting a big rebound in quarter two.
Fuel did not have much concern on our margins this quarter.
Thank you, sir. Sir, next question po. May we know what's the percentage of fuel and percentage of electricity to total cash costs? Appreciate if you can also share the impact of the recent oil or power price increase on a per unit cost basis. Also, is it fair to assume that the company can still pass through the increase in cash costs given the strong pricing and dollar environment?
Our percentage-wise, fuel is about 11% of its total cash cost. Electricity is insignificant. You can peg it probably maximum 1%. Per ton, we're about $4.75 per tonne. We should have no problem with the increased fuel costs to continue what we're trying to do in DMCI Mining, both in Zambales and Palawan.
Sir, what is your fuel buffer?
Our fuel buffer is about 30 days normally, but with this fuel crisis, we expanded it to 45. We actually got some tank storage in Palawan now, and then we increased some facilities in Zambales. We're at a healthy range. We don't see the supply being a obstacle to our operations moving forward.
Okay, po. Next question. Were there expenses that were front-loaded in the first quarter that we should no longer see in the next period? If so, were these substantial?
I think majority of the expenses you saw in Q1 belong to the Long Point mine development costs and start-up costs. Outside of that in Palawan, we front loaded some exploration costs as well. We did not foresee this to continue throughout the year.
Next question. May we know the current split of exports between Indonesia and China?
Q1, Indonesia played a heavy role. About 65% of our ore went to Indonesia and 35% to China. Currently, we're seeing that swap to about 70% in favor of China and 30% to Indonesia.
Next question. What would EBITDA have been absent the impact of the new mining Fiscal Regime Law?
With the new mining Regime Law, we're about PHP 714. I believe without it, we would have been around PHP 714 EBITDA.
What are the production targets for Long Point and ZCMC? Are there other mines that you plan to develop over the medium term, and what is the expected timing for the start of operations?
Our goal this year is to exhaust our ECC in Long Point at 1.2 million tonnes, and as well exhaust our ECC and ZCMC at 1 million tonnes. However, if you're talking about expansion and what's coming online, I think both of those mine sites, we're working on an ECC amendment, so we would like to expand those in the very short term. In the medium term or actually hopefully by year-end or 2027, we hope to have our Dangla mine operational. That's about a bit less than 1,000 hectares. Then shortly thereafter, maybe end of 2028, if not 2029, we have a 6,000 hectare property called Moorsom. We hope to have these both online sooner than expected.
Sir, last two questions.
Sure.
Can you share your views on the impact of the higher HPM prices in Indonesia, and how will this impact your pricing of saprolite and limonite ores?
This HPM price in Indonesia is a reference point. As you know, Indonesia has a volatile pricing market mechanism. It's basically based on taxation. This HPM price is trying to push more taxation on their local ore. Just to give you some scale about the Philippine ore. Philippine ore in Q1, they shipped out almost 180 shipments in Q1. In April alone, they shipped out 160 shipments. A portion or a large portion of that has gone to Indonesia. They're flushed with supply right now. What that has done is created a lot of options for the Indonesia plants and also created a lot of congestion. Now the quotas of Indonesia are slowly getting diminished as well.
If you talk about the price impact in the short term, we honestly think it'll probably go a bit lower because they're looking for more medium high grades, saprolite material. A lot of the material that went in the first quarter was limonite grades or the lower material. They're putting a premium on the saprolite grades. We think when the quotation will be revisited by half the year this year or a few months from now, we think this price might shoot up for the Philippines and with the eventual slowdown of Surigao by Q4. Short term price might be hit for the Philippines, but medium to long term, maybe it might rebound back, stay level with these high prices. We hope that happens.
Last question po. Any updates on the planned nickel processing facility?
There's no real significant updates right now. As we continue to do this permitting strategy that we have, we continue to get successful in getting these assets permitted. I think there's a clear direction to hopefully get this plant online if the environment can absorb and the window of opportunity is there. We're still hoping that we can play in this space.
Thank you. Thank you so much, sir TDCR, for answering all of our questions po. Now we move on to questions for Concreat Holdings Philippines. We have this afternoon, Mr. Herbert M. Consunji, President and CEO, and Mr. Brian Lim, Vice President, Treasurer, and CFO. Hi, good afternoon, sir HMC and BPL. First question, how are sales volume so far in the second quarter of 2026, given that construction projects are being put on hold amidst the crisis?
Yes, good afternoon. I'll answer the second part wherein when you said constructions projects are being on hold. Well, we have shifted our strategy. We are more on the bag product. 70% is bagged and 30% is bulk. The bulk goes to the bigger project like DPWH and buildings. Although we service our own project also in DMCI, in DMCI Homes. The bags are completely well, we have, we are maintaining no the product now. In fact, I want to tell you that the first quarter that we had, we had a 36% increase in sales based on year-on-year on first quarter. 36% is a very positive indication that no, people are, you know, constructing.
You know, we announced a price increase, so I presume they were hoarding, that's why it increased. The second quarter of April, it's a bit slow. You know, first of all because, well, of course [Non-English content] , the reason that they have hoarded, no. Second is that we have the Holy Week and a lot of holidays. This May, it has rebound to its original course, no. This year we're planning more or less we have to. Now the increase will be 18% for the whole year, you know, and we think we'll be able to hit this, no.
As I said, no, we have shifted the market now from the big ticket items and like government, we shifted to individual and small contractors that are using bags.
Secondly is that, in the Visayas, we are trying to dislodge the imported cement there, no, which we are very successful. Before they used to be 30%, now they're down to 20%. With that trend, I think we'll be able to penetrate the market.
Thank you, po, sir. Next question: What is your production target this year?
This year we're planning to do 4.7 million tonnes, which is roughly 18% more than last year. We feel that this is sustainable because most of our plants now are reliable, and we have reduced our clinker factor to roughly 53%, which is very positive. I think we'll be able to hit our targets.
Thank you, sir. Next question, po, addressed to sir BTL. Is the first quarter 2026 EBITDA margin of 5% sustainable given higher energy costs?
Hi, good afternoon. We believe we can sustain it. In fact, we aim to improve it further. As mentioned by Mr. Herbie, first, we target a strong double-digit volume growth. Next is we continue to implement price adjustment in certain markets and sectors. Third, on the cost side, those that we can control. There's still a lot of things we can do. One, since fuel prices are high, we focus on power and fuel consumption efficiency. We continue to invest also in plant reliability to support the higher and more stable production. We also want to still maximize the use of fly ash and lower our clinker factor, and also on the logistics efficiency to lower our distribution costs. There's still plenty of things we can do.
Thank you.
Thank you. Thank you so much, sir HMC and sir BTL. Now we move on to questions addressed to Holdings, to DMCI Holdings. The first question is addressed to Mr. Joseph Adelbert V. Legasto, Deputy Chief Finance Officer. Hi, sir. The question goes: On CHP, DMCI noted a 63% decline in net loss from CHP, but for SEC, the change was only 6%. What is the-- Why the difference?
Thanks. Thanks for the question, Hannah. It's very good. The variance primarily is driven by the difference between accounting treatments and consolidation between Semirara, Concreat, and DMCI Holdings. As a background, there are intercompany coal sales between Semirara selling coal to CHP, which basically uses the coal to fire up its cement production plants. This creates a gross profit at the Semirara level that needs to be assessed for elimination depending on the reporting entity. The extent of and location of accounting eliminations differ across reporting lines, also considering that each of the entities have their own respective minority shareholders. For example, at the Semirara level, consistent with equity accounting principles, only the unrealized gross profit of the ending inventory is eliminated.
However, at the DMCI Holdings level, where both Semirara and Concreat are fully consolidated, the group eliminates the full gross profit on the intercompany coal sales with the appropriate allocation to minority interests. In summary, the disparity you see is because of the difference in eliminations between the entities and also the ownership structure.
Okay. Thank you. Thank you, sir JVL, for the explanation. Now we move on to questions addressed to our Chairman and President, Mr. Isidro Consunji. Hi, sir. The question po, first question: What prompted the decision to declare regular dividends in May rather than in March? What conditions would need to be met for the company to consider declaring special dividends this year?
Thank you, Hannah . Good afternoon, everyone. Positionally, the declaration of DMCI HI dividends is after the declaration of Semirara's dividends to HI. For this year, Semirara, because of the impending bid
Did not declare its any dividends, despite the fact it's quite liquid to do so, preparing for the bid. At the board meeting yesterday I think yesterday?
Yesterday.
That was yesterday. We were informed that by the CFO that despite the fact that Semirara didn't give any dividends to HI, the other subsidiaries were able to give so and even complying with the minimum 25% cash dividends of earnings of the previous year. We said, might as well give anyway, might as well give the dividends now, and when the Semirara dividends come in, give another set of special dividends. The 25% came to PHP 0.28, but it's easier to remember PHP 0.30, so we made it PHP 0.30 for now.
Thank you. Thank you. Thank you, sir. Next question po. Are there plans to infuse remaining assets into Dominion Holdings, and what would be the timeline for this?
Let's see. I think I'm not the right person to answer this, eh? First of all, DMCI is not a stockholder of Dominion Holdings. It's Dacon Corporation, which is a minority stockholder. The majority stockholder is the Sy family. It's better that you ask them what their intention is. We're just a passenger here. They're the pilot seat. Thank you.
Thank you, sir. Sir, last question po. Are there any mining assets that you're looking to acquire, whether here or abroad?
Yeah, well, definitely we're not looking abroad. I think our organization is not designed for international operations. Yes, we are looking at several mining assets. In particular, one copper and gold and another gold asset. It's very premature at this point in time. It's too early. I cannot give you any guidance on whether this exploration phase will be successful or not. Maybe sometime before the end of the year, we have to give you some more update. Thank you.
Thank you. We've covered all of the questions received this afternoon. Before we end, may we request our Chairman and President, sir IAC, for his closing remarks.
Good afternoon again, everyone. Just a short summary of what was discussed earlier. Construction is plenty of headwinds, you know, weak demand, high cost push, inflation and both in private and public. Well, this happened before. We're able to weather it out, we'll probably be able to weather it out. Financially, the company's quite financially stable. There's no [bank] loans, there's yet a lot of receivables. Okay? DMCI Homes is actually on the way to recovery. It's registered higher revenues this year compared to last year. I think it's because our pricing is very competitive and our product's probably one of the best, if not the best in its class. It's a value for money.
Given such situation, in spite of a negative or negative sentiment in the market, we're able to push through. We also have a healthy cash balance because a lot of what we're selling now is already finished inventory. We've already expended the cost. We're generating a lot of positive cash flow, which we're using to pay down our debt. We intend to pay down about PHP 4 billion or PHP 5 billion of debt this year. Because of our high inventory level, which will go down over the future, we intend to continue this reduction of debt in the six period, foreseeable period. We slowed down launches because we have enough work in progress, and I think there's no point in creating new launches if the market is uncertain. Okay.
Since we are fully equipped, we don't see any significant capital expenditures to maintain operations at this level. In DMCI Power, very good news, we've been able to get new PSAs, so we're building a lot of capacity. In spite of the fact that we are investing a lot and giving dividends, our debt level has remained rather flat. Our earning capacity is improved. Our management is very concerned about with probably cost reductions. We bought a lot of spare standby units to replace rentals with a payback of less than one year. We are now looking at a new market. We call it the two ten market. Yes, we are trying to a little bit of a CSR, like to electrify unserved communities, rather small.
I think we're aiming at 10 islands and two municipalities, hopefully in the next six to 18 months. We've been very excited because the LGUs and the local facilities have been encouraging us to do so. We'll probably report more on that next week. Okay? DMCI Mining has started, mentioned by Mr. Reyes earlier, has started Long Point, which is probably one of the best nickel mines in the country. Right now, we just started about two months ago?
Yeah, March.
Two months ago. We started with one shipment the first month.
March 2.
March 2, April 4.
May 5.
May 5.
June 6.
We are almost at full streams in DMCI Mining. We expect dramatic earnings growth for DMCI Mining this year. If their permitting process is successful for this year, we'll continue that growth for the next year and the year after. We think we have a very good mines and our reserves are very huge. The commodity prices doesn't drop. I think we should see very good prospect for DMCI Mining in the future. We've gotten our costs way down very tight. Our people are very energized, especially the people in Palawan, because they've been idle for three years now, and this is the first time they're going back to full operation. I'm very confident about DMCI Mining. Okay. Semirara, of course, has certain challenges. The bid for the extension.
They have a chronic seepage problem which trying to solve. The fuel prices has increased, we're able to create a fuel surcharge that more or less balance the effect of the increase in fuel prices with our increase in selling prices, fuel surcharge locally. In export, the price increase from the first quarter to the second quarter has been more than the fuel cost increase so far. Although we are expecting a lower volume for the second quarter, dramatically lower because of our seepage problem. I don't know exactly how the year will end, depending on how we solve this bidding and how we solve this seepage problem. We have not done any significant capital expenditure waiting for the outcome of the bid. Okay?
In the power side of Semirara, we have essentially rebuilt what was all four plants, so we don't expect any prolonged outages this year anyway. For the record, the prices for the second quarter this year of electricity is significantly better than the prices of electricity on the first quarter. Concreat is a work in progress. It's a lot more challenging than we expected. We are cutting down on manufacturing costs. We're cutting down on distribution costs. We're trying to increase our selling prices, net selling prices, and focusing on special markets where we have advantages and disregarding markets. So far, we're quite encouraged by the positive energy of the management. Although we're a bit delayed, we expect to come up.
Anyway, the president of Concreat promised that he will turn around the company. I'm expecting Mr. Herbie Consunji will have his team to do the same. Of course, the last one, Maynilad, which did an IPO late last year at PHP 15. It stopped trading at PHP 24. It is all-time high at [PHP 0.22] before. Given the report of Maynilad management, we think the growth of income of Maynilad is going to be quite steady and predictable. Thank you very much, everyone, for attending our analyst briefing. [Non-English content ] for your support. Good afternoon to everyone. Thank you, [Paul].
Before we end, we would like to thank all of our panelists, guests, analysts, investors for joining us today. We would also like to extend our appreciation to everyone who worked behind the scenes in making today's briefing possible. A copy of today's presentation materials will be uploaded to our website within the day. We also invite everyone to view the DMCI Holdings 2025 Annual and Sustainability Reports, which are available on our website, www.dmciholdings.com. Lastly, we would like to invite everyone to join our 2026 Annual Stockholders Meeting this coming Tuesday, May 12th, at 9:30 A.M. You may register through the QR code flashed on your screen. With that, we conclude today's briefing. Thank you once again, and have a good weekend, everyone.