MTD Walkers achieves turnaround in revenue despite annual loss

Monday, 4 June 2018 01:00 - - {{hitsCtrl.values.hits}}

Reports robust order book of larger scale, long-term projects

MTD Walkers has achieved a turnaround in the 2017/18 financial year with healthy growth in turnover although reporting a loss.

For the year ended 31 March 2018, MTD Walkers’ revenue was Rs. 16.1 billion, up 20% from a year earlier. The Group reported a loss of Rs. 511 million in 4Q and an annual loss of Rs. 2.8 billion. “The management of the Group is confident of a turnaround during the coming financial year due to the commencement of multiple large-scale infrastructure projects in multiple sectors,” a statement by the company said.

Low levels of investment in infrastructure over the past few years compelled the Group to take on smaller projects at thin margins to engage its existing resources.

The prevailing shortage of skilled labour resulted in the Group not being able to achieve its usual productivity levels, resulting in project delays and increased project and finance costs. The unanticipated increase in interest rates during the year further contributed to the loss of the Group. Delays in commissioning the shipyard investment in Mutuwal, which introduces cutting-edge technology to Sri Lanka, also contributed towards the higher interest and overhead costs of the Group.

Going forward, the Group has strong turnaround plans in managing and delivering on its robust order book of larger scale, long-term projects. The Group expects profitability to show a positive transformation through all sectors being engaged in large projects with healthy margins.

The highways sector of the Group will be driven by work done on the Central Expressway project and four ADB-funded UVA Province Integrated Roads. The water sector will be driven by a few large projects, notably the Upper Elahara Canal project. The real estate portfolio of the Group also promises positive growth having launched 1,080 new apartments in two major developments, targeting the middle income housing shortage. These projects are expected to deliver high profits due to being constructed by the building construction division.

“All these changes are expected to contribute towards positively impacting the Group’s bottom line in the coming financial year despite prevailing tough times,” the statement from MTD Walkers added.