Access Engineering records Rs. 1.2 b after tax profit in 1H

Chairman Sumal Perera

Access Engineering PLC (AEL), the country’s leading civil engineering enterprise has recorded an after-tax profit of Rs. 628 million for the quarter, a YoY (year-on-year) rise of 23.6%. 

Group after tax profits for the quarter stood at Rs. 654 million, against a corresponding after-tax profit of Rs. 534 million in 2020/21.

In a statement, AEL said key revenue components of the group included construction (51%), construction related materials (35%), followed by automobile (12%) and property (2%). Revenue improvement in all key sectors resulted in a steady margin improvement during the quarter, with the exception of the automobile sector, which was hampered by the Government-imposed vehicle import restrictions. Core construction activities recorded a 55.6% YoY increase in revenue during the first half amounting to Rs. 8.2 billion. With a topline of Rs. 5.65 billion, the construction material segment performed impressively during the six-month period owing to the sale of asphalt and ready-mix concrete. The rural road network expansion project, as well as ADB and World Bank funded road development programs, are driving up demand for construction materials. Expansion of the expressway network, including Central and Ruwanpura expressway developments and the elevated road network, is expected to create more demand for construction material in the future. Today Access Engineering is one of Sri Lanka’s largest asphalt and concrete producers in the country serving a significant market share. The company also recently built more capacity in asphalt production with the commissioning of new plants in Ganewalpola and Mathugama. 

The main construction projects that contributed to the company revenue during the period included the i-Roads project, Nittambuwa Pasyala Road Project, Elliot Place Housing Project, Stadiumgama Housing Project, Bloemendhal Housing Project, Piling and earth works for the New Terminal Building and Viaduct at Bandaranaike International Airport, and Anuradhapura Water Supply Project, while other significant projects such as the Orugodawatta Housing project and the multi-storied public car park development at Union Place are some of the major ongoing projects that are expected continue to improve the topline of the company in future. The company recently commenced work on its flyover trio – Gatambe, Kohuwela and Slave Island flyovers – which is expected to reduce traffic congestion by catering to the insufficient road capacity in the respective areas. The company is also engaged in the construction of a T-Mall flyover and several foot bridges in Kenya as a part of its overseas work. 

Import restrictions, which have been in place since the previous financial year, have stalled the performance of the automobile industry in general. This had a considerable influence on the selling of new vehicles, which is the main operation of Sathosa Motors PLC. Nevertheless, the new Isuzu Marine sector, workshop operations, and spare parts sales all showed a marked improvement. As a result, the sector was able to return to profitability with a marginal profit of Rs. 10 million against a loss of Rs. 31 million in the corresponding year. 

During the period, the company’s two ongoing real estate projects fared well, with above industry average sales. Capital Heights Rajagiriya is expected to be handed over to the owners by the end of the 2021/22 financial year, while Marina Square, having completed up to podium level in all the buildings, is in superstructure construction. Access Towers I and II, which lease office and commercial space, have maintained high occupancy rates throughout the year to date. The property sector recorded a segment profit of Rs. 267 million during the first half which was a 25% growth over the corresponding period of the previous year. 

Gross profit for the quarter was recorded at Rs. 1,338 million and Rs. 979 million at Group and Company level respectively, with corresponding margins of 14.7% & 12.7%. As at 30 September 2021, the total asset base of the company amounted to Rs. 64.03 billion and Rs. 48.44 billion at Group and Company level respectively. The equity attributed to the owners of the company was recorded at Rs. 24.26 billion at the Group level, while it was Rs. 22.82 billion at Company level. Net asset per share of the Group and Company as at 30 September stood at Rs. 24.26 and Rs. 22.82 respectively. The company declared its first interim dividend for 2021/22 financial year amounting to Rs. 0.25 per share paid in September. This is in addition to paying Rs. 500 million as dividends in June.