DMCI Holdings, Inc. 3/F, DACON Building 2281 Pasong Tamo Ext. - - PowerPoint PPT Presentation

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DMCI Holdings, Inc.

3/F, DACON Building 2281 Pasong Tamo Ext. Makati 1231 Philippines

• Dr. Victor Limlingan, Managing Director

April 2014

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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.

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The DMCI Group: Engineering Expertise

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Contents

• History of DMCI
• The DMCI Group: Financials
• Portfolio Management
• Target Portfolio (5-year plan)
• Investors

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• 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

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David M. Consunji

Founder

• “…building is not just an
• ccupation 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.”

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Contents

• History of DMCI
• The DMCI Group: Financials
• Portfolio Management
• Target Portfolio (5-year plan)
• Investors

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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

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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

• n sale (P8,423 - Parent)

198,004 9.56%

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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

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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)

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876,092,267 29% DMCI Mining

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2,950,434,040 15% Total

18,937

(core net income plus one-time gain

• n sale (P8,423 - Parent)

60,022,946,024 31%

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Contents

• History of DMCI
• The DMCI Group: Financials
• Portfolio Management
• Target Portfolio (5-year plan)
• Investors

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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)

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Power

Sem-Calaca: 1,000 MW expansion in addition to existing 600 MW capacity. Phase 1:

• ngoing construction of 2x150

MW plants (CFB). Phase 2: planned construction of 2x350 MW plant (pulverized coal)

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Construction Progress (1 of 2) As of March 2014

94% 61% 100% Boiler Steel Structure Main Powerhouse Coal Yard

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Construction Progress (2 of 2) As of March 2014

94% 94% 94% ESP Area Chimney Circulating Water Trench

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Power (Sem-Calaca)

BEFORE

2009

Generation (GWh) 181 Revenue (Php Mn) 444 Net Income (PhP Mn)

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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)

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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

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Award 1: TPLEX Tarlac-Pangasinan-La Union-Expressway 15B Php*

* 15B Php out of 20B Php total for the entire project

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Awards 2: MRT - 7 20B Php

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Award 3: NAIA Expressway 10B Php

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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

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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

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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

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Prospects 1: LRT - 1 Extension

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Prospects 2: Connector Road (MPIC) (ABOVE LEFT: blue segment) Prospects 3: CALA Expressway (ABOVE RIGHT)

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Prospects 4: C - 6 (CITRA) 50B Php estimated

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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

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DMCI Mining

Improvement of operating capacity of nickel assets (ENK & TMC) underway. Long term

• ption is to use Direct Shipping

Ore to create capital to undertake nickel processing of lateritic nickel

• re (<1.2% nickel ore)

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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

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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.

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SPUG Power Plants 1:

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SPUG Power Plants 2:

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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

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Infrastructure

• Proponent vs. Contractor

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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)

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Coal

Maintain production: 7.7 MTs/yr

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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

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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

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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%.

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Maynilad Water

After the partial sale of its stake in Maynilad Water, DMCI Holdings maintains or “holds” at 25%

• wnership.

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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

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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.

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Contents

• History of DMCI
• The DMCI Group: Financials
• Portfolio Management
• Target Portfolio (5-year plan)
• Investors

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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%

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2014 Portfolio ~

Power Construction Coal Real Estate Maynilad

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2019 Target Portfolio ~

Power Construction DMCI Mining DMCI Power Infrastructure Coal Real Estate Maynilad

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Contents

• History of DMCI
• The DMCI Group: Financials
• Portfolio Management
• Target Portfolio (5-year plan)
• Investors

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Pledge to Investors

• DMCI will seek a fair, not an over valuation of its shares
• DMCI will focus on the long-term, not the short-term
• DMCI will respect the rights of its Minority Stockholders