CONSUNJI-LED DMCI Holdings, Inc. is reducing its capital expenditure by more than half, with its real estate business slowing down acquisitions for the rest of the year.

In a message during the company’s virtual annual stockholders’ meeting, Tuesday, Chairman and Chief Executive Officer Isidro A. Consunji said it expects weak demand and low selling prices due to the pandemic’s impact, which brought down its first-quarter profit.

“We expect weak demand and low selling prices to affect most of our businesses because of reduced economic activities, supply chain disruptions, job insecurity, lower overseas remittances and marked slowdown in private sector-led investments,” the official said.

To preserve cash amid a challenging business environment, the listed conglomerate will be making a 52% cut in its capital spending to P19.4 billion from the original P40.4 billion.

Among units, DMCI Homes will have the deepest cut to P14 billion from P31 billion, as the property developer will cap its land acquisition spending by 79% to P4 billion from the planned P19-billion budget.

The conglomerate noted that its consolidated cash and cash equivalents by end-June was at P14 billion.

While debt-free at the parent level, DMCI posted P52.6 billion in total debts as of June, which a fraction, or P14.6 billion, will mature in the next 12 months. DMCI Homes and Semirara Mining and Power Corp., both making up the bulk of its debts, can sustain itself during the recovery phase with a combined P53 billion in unused credit lines.

Mr. Consunji claimed the company could be more resilient “if supported by massive public spending and timely issuance of permits and rights-of-way.”

“Fortunately, we can count on our healthy balance sheet and low debt exposure to sustain us during this difficult time,” he assured stakeholders.

While the company is unsure when it would recover, it is certain that time will come when its income and dividend payouts will return to their pre-pandemic levels.

“At this stage of the pandemic, we cannot predict how the business environment will evolve but it will definitely take some time before our company can rebound to its pre-pandemic income and dividend payout levels,” the company’s head said.

In the first three months of 2020, the diversified conglomerate’s net income took a dive, plunging by 78% to P616 million, compared to P2.7 billion in the same period in 2019, no thanks to the pandemic-induced quarantine, low market prices, and operational headwinds.

All of its units registered lower income contributions with SMPC delivering P623 million, down 51% from P1.3 billion it posted in the first quarter a year ago.

DMCI Homes shed P197 million in the quarter, compared to P481 million it previously earned, because of the slowdown in revenue recognition during the strict lockdown phase when collections were deferred and construction projects were halted.

Its construction unit DM Consunji, Inc. chipped in P170 million in income contribution to its parent; DMCI Power Corp. injected P97 million; DMCI Mining Corp. delivered P26 million; and west zone concessionaire Maynilad Water Services, Inc. remitted P379 million.

On Tuesday, shares in DMCI Holdings dipped by 1.24% to close at P3.98 each.