Core construction and property sectors boost Access Engineering 1Q

Access Engineering PLC, the country’s premier civil engineering company, has recorded an impressive after-tax profit of Rs.550 million at company level for the quarter ended on June 30, 2021 (1Q22), up 162 percent year-on-year (YoY), despite the challenges posed by the current pandemic. 

The group after-tax profits for the three months stood at Rs.517 million, against a corresponding after-tax profit of Rs.43 million in 20/21.

The significant margin improvement was owing to all key sectors recording revenue increases during the quarter, except for the automobile sector, due to the government-imposed import restrictions on vehicles. 

The core construction activities and property sector recorded YoY increases in revenue during the quarter, amounting to 56.1 percent and 18.9 percent, respectively. 

The performance of the construction material segment was impressive too with a top line of Rs.2.56 billion, primarily on the sale of asphalt and ready mix concrete. 

There is a growing demand for construction material, driven by the rural road network development project along with the Asian Development Bank and World Bank-funded road development programmes. 

The expansion of the expressway network and elevated road network is expected to create more demand for construction material in future. Access Engineering is one of Sri Lanka’s largest asphalt and concrete producers with a notable market share. 

The company’s core construction activities amounting to Rs.3,284 million contributed to 46.5 percent of the group’s consolidated revenue, with construction-related material contributing to 36.3 percent (Rs.2,566 million), property 2.6 percent (Rs.182 million) and automobile 14.6 percent, respectively during the quarter. 

The main construction projects that contributed to the company revenue during the quarter included the Bloemendhal Housing Project, Orugodawatta Housing Project, Stadiumgama Housing Project, Elliot Place Housing Project, i – Roads Project, Anuradhapura Water Supply Project, Nittambuwa Pasyala Road Project, piling and earth works for the new terminal building and viaduct at Bandaranaike International Airport and the recently commenced multistoried public car park development at Union Place. 

The company is also engaged in the construction of a T – Mall flyover and several foot bridges in Kenya, as part of its overseas work. 

The performance of the automobile sector was hampered by the import restrictions that continued since last financial year. This had a significant impact on the sale of new vehicles, which is the core business of the said sector. Nevertheless, the new ISUZU marine sector, workshop operations and sale of spare parts showed improvement.

The company’s two ongoing real estate projects performed well during the quarter with satisfactory sales. While Marina Square is in the process of completion of sub-structure work of all towers up to the podium levels, Capital Heights Rajagiriya is expected to be handed over to the owners by the end of 2021/22 financial year.

Access Tower I and II, which are in the business of office and commercial space leasing, continued to experience good occupancy rates. 

Gross profit for the quarter was recorded at Rs.1,093 million and Rs.776 million at group and company levels, respectively, with corresponding margins of 15.5 percent and 13.7 percent. 

As at June 30, 2021, the total asset base of the company amounted to Rs.59.70 billion and Rs.44.88 billion at group and company levels, respectively. 

The equity attributed to the owners of the company was recorded at Rs.23.85 billion at group level while it was Rs.22.44 billion at company level.  Net asset per share of the group and company as at June 30, 2021 stood at Rs.23.85 and Rs.22.44, respectively. 

The company declared its first interim dividend for the 21/22 financial year, amounting to 25 cents a share, payable on September 7, 2021. This is in addition to paying Rs.500 million as dividends in 20/21.  

The board of directors of Access Engineering PLC comprises of Sumal Perera (Chairman), Christopher Joshua (Managing Director), Rohana Fernando (COO), Shevantha Mendis, Dharshana Munasinghe, Dilhan Perera, Shamal Perera, Ranjan Gomez, Professor Malik Ranasinghe, Niroshan Gunaratne and Dinesh Weerakkody.