PH_DMC: earnings barely moved, but behind them — lower generation and higher debt

25 апреля 2026 года PH_DMC раскрыла результаты за первый квартал 2026 года: чистая прибыль снизилась на 6,8% год к году до 6 214,7 млн песо, выручка — на 2,4% до 31 100,2 млн песо, при этом EBITDA выросла на 0,4% до 8 877,4 млн песо. На фоне этих цифр акции торгуются с P/E 5,6 и EV/EBITDA 5,0, что выглядит привлекательно, но за стабильностью прибыли скрываются падение выработки электроэнергии и рост долга.

Key takeaways

— Revenue fell 2.4% due to declines in energy and construction, but growth in real estate and nickel softened the blow

— EBITDA rose 0.4% thanks to cost control, but net margin declined to 20.0%

— Net profit fell 6.8% due to weakness at SMPC and dilution of the stake in Maynilad after its IPO

— Debt increased by 7.1 billion pesos in the quarter, to 37,839.4 million pesos, with net debt/EBITDA at 1.31

— Operating cash flow for the quarter was 6,176.7 million pesos, and capital expenditures were 1,000.5 million pesos

— Trailing dividend yield is 9.8%, making the stock attractive for income-oriented investors

— On the portal's model, the stock has upside potential of +13% from the current price

Attractiveness

Key figures, PHP bn

Revenue fell 2.4% due to declines in energy and construction, but growth in real estate and nickel softened the blow

In Q1 2026, PH_DMC's revenue reached 31,100.2 million pesos, down 2.4% year-on-year. The main drag came from the energy segment (SMPC) and construction (D.M. Consunji Inc.): energy revenue fell 19% to 5.08 billion pesos due to lower output from unplanned outages, and construction fell 19% to 3.62 billion pesos due to slower project progress.

Partially offsetting the decline were real estate (DMCI Homes, +5% to 4.92 billion pesos), nickel mining (+19% to 1.65 billion pesos), and off-grid power (+6% to 1.87 billion pesos). The cement business Concreat, consolidated since December 2024, contributed, but its net profit remained negative.

EBITDA rose 0.4% thanks to cost control, but net margin declined to 20.0%

EBITDA for Q1 2026 was 8,877.4 million pesos, up 0.4% year-on-year. EBITDA margin improved from 27.7% to 28.5% — the company cut cash costs by 3% to 22.2 billion pesos, mainly due to lower cost of sales in energy and construction.

However, net margin declined from 20.9% to 20.0%: operating expenses rose 7% (to 3.84 billion pesos), finance costs increased 23% (to 666 million pesos), and depreciation rose 8% (to 3.13 billion pesos), eating into operating profit.

Net profit fell 6.8% due to weakness at SMPC and dilution of the stake in Maynilad after its IPO

Net profit for Q1 2026 was 6,214.7 million pesos, down 6.8% year-on-year. The main drag was the energy segment: SMPC contributed 2,194 million pesos, down 13%, due to lower power generation and coal shipments.

An additional factor was the dilution of the stake in Maynilad after its IPO in November 2025: the associate's contribution fell 23% to 714 million pesos. Partially offsetting the decline were real estate (+3% to 1,277 million pesos), nickel (+8% to 440 million pesos), and off-grid power (+12% to 302 million pesos).

Debt increased by 7.1 billion pesos in the quarter, to 37,839.4 million pesos, with net debt/EBITDA at 1.31

As of end-March 2026, PH_DMC's net debt stood at 37,839.4 million pesos, up 7.1 billion pesos in the quarter. The increase was driven by new borrowings at SMPC, partly offset by repayments at DMCI Homes and D.M. Consunji Inc. Over the trailing twelve months, net debt declined by 26.8 billion pesos.

Net debt to EBITDA for the trailing twelve months is 1.31 — a moderate level that does not pose servicing problems. However, the quarterly trend shows the company is increasing borrowings to fund capital expenditures and dividends.

Operating cash flow for the quarter was 6,176.7 million pesos, and capital expenditures were 1,000.5 million pesos

In Q1 2026, PH_DMC's operating cash flow was 6,176.7 million pesos, well below the 12,872.4 million pesos a year earlier. The decline reflects lower profit and changes in working capital, notably a 261% increase in coal inventory to 6.4 million tonnes.

Capital expenditures for the quarter were 1,000.5 million pesos, markedly below the average of previous quarters (e.g., 8,316.2 million pesos in Q4 2024). Free cash flow after capex is positive, supporting dividend payments.

Trailing dividend yield is 9.8%, making the stock attractive for income-oriented investors

Over the trailing twelve months, PH_DMC paid dividends yielding 9.8% at the current price. This is significantly above the key rate and the company's own historical levels, making the stock one of the highest-yielding in the market.

Given current profitability and cash flow, the company can sustain payouts at this level. The main risk to dividends is further deterioration in the energy segment and higher capital expenditures, which could constrain free cash flow.

On the portal's model, the stock has upside potential of +13% from the current price

Our fundamental value-creation model, based on EBITDA growth and a target multiple, values PH_DMC's share at 13% above the current market price. This is moderate upside, reflecting the stability of the business and attractive dividend yield.

At current multiples of P/E 5.6 and EV/EBITDA 5.0, the stock trades cheaply relative to its own history, leaving room for growth if the company can stabilise the energy segment.

Valuation on the latest reported figures

Bottom line

PH_DMC reported Q1 2026 with a moderate decline in profit but stable EBITDA. Strengths remain real estate, nickel, and off-grid power, which offset weakness in coal-fired generation. One-off items, such as an insurance claim of 110 million pesos, supported the result but did not change the picture. The key question for holders is whether SMPC can restore output and stop the rise in debt, which increased by 7.1 billion pesos in the quarter. At the current price, the stock looks attractive due to low valuation and high dividend yield, but improvement in the energy segment would be the key catalyst.