PSE Points to Ponder

We have earlier commented that the COVID-19 pandemic had a significant adverse impact on the operations and finances of DMCI Holdings, Inc. ( DMC ) during the first half of 2020 (1H 2020) which resulted to a weaker financial footing for DMC as of end of 1H 2020 . The weakness in the results of DMC sent it shares plummeting to a low of 3.40 a share almost revisiting the 3.10 a share low at the height of the sell down in March 2020. The Consunji’s took advantage of the weakness in the share price of DMC, accumulating DMC shares along the way. We have commented earlier that the Consunji’s private holding company, DFC Holdings, Inc., had accumulated a total of 55,425,100 DMC shares as of the end of August 2020 . It appears now that DFC Holdings is not yet done accumulating DMC shares. For the first two weeks of September 2020, DFC Holdings bought 3,892,000 DMC shares. The Consunji’s accumulation of DMC shares signals that they have the operational and financial expertis...

DFC Holdings, Inc. is one of the private holding company of the Consunji family’s investment in the listed DMCI Holdings Inc. ( DMC ). The other being the DACON Corporation. DACON Corporation and DFC Holdings, Inc. are the principal stockholders of DMC, holding 51.51% and 17.92% of the outstanding shares of DMC as of end of 2019, respectively. DFC Holdings, Inc.’s 17.92% holdings in DMC as of December 31, 2019 is equivalent to 2,379,799,910 shares. COVID-19 pandemic restrictions severely impacted most of the operations of DMC weakening its finances triggering the market to lower the valuation of DMC. DMC dip to a 52-week low of 3.10 a share. The dip in the share price of DMC gave DFC Holdings, Inc. the opportunity to snap up DMC shares. All throughout 2020, DFC Holdings, Inc. bought a total of 55,425,100 DMC shares to increase its holdings to 2,435,225,010 shares as of end of August 2020. For August 2020 alone DFC Holdings bought 13,485,000 DMC shares costing it 50...

DMCI Holdings, Inc. and subsidiaries ( DMC ) reported a consolidated net income of 3.1 Billion Pesos for the first half of 2020 (1H 2020). Although it reported a net income of 3.1 Billion Pesos it did not generate cash from operations. Worse is that its capital expenditures for the period required 3.2 Billion Pesos. The cash burn for 1H 2020 of DMC was around 6.9 Billion Pesos reducing its cash balance to just 14.7 Billion Pesos at the end of 1H 2020. The 14.7 Billion Pesos cash balance looks massive but if you look at the debts due in the next 12 months of 16.3 Billion Pesos it would be worrisome. It is worrisome because there is no significant cash coming from operations. Its biggest hope is its biggest unit Semirara Mining and Power Corporation ( SCC ) which has the biggest potential to generate cash from operations but its situation also looks bleak. SCC has a cash balance as of end of 1H 2020 of 3.8 Billion Pesos but the debts due in the next 12-month period is at 8.2 Billion ...