Access Engineering ends FY21 on a high with Rs. 2.3 b profit

• Distributes Rs. 1 b in dividends to shareholders

Access Engineering Plc Chairman Sumal Perera

Access Engineering PLC has concluded FY21 on a high, posting an after-tax profit of Rs. 2.3 billion, up by 21% from the previous year.  

In a statement, AEL said the company and the Group recorded an after-tax profit of Rs. 1,053 million and Rs. 911 million respectively for the fourth quarter, indicating a faster and healthy recovery of operations, despite the lingering impacts of the pandemic. 

Group after-tax profits for the 12 months stood at Rs. 2.18 billion. Similar to group performance, company performance for the 12 months was also impressive with an after-tax profit of Rs. 2.3 billion corresponding to a year-on-year (YOY) growth of 20.9%. 

Gross profit for the quarter was recorded at Rs. 1.38 billion and Rs. 1.06 billion at Group and Company level respectively, with corresponding margins of 18.2% and 14.6%. For the cumulative period gross margin was recorded at 17.6% and 13.3% at Group and Company level respectively.

AEL said despite some of the sectors recording revenue decreases during the quarter, the increase in sales of construction-related materials accounted for the good performance of the company. Core construction activities, property sector and the automobile sector recorded YOY decreases in revenue during the quarter amounting to approximately 0.2%, 18.8% and 24.7% respectively. 

Nevertheless, this decrease was offset by a substantial growth in the sale of construction related material during the quarter. 

Growth in construction-related materials of the company was primarily driven by the ever-increasing demand for asphalt. This demand is primarily driven by the rural road network development plans of the country along with ADB and World Bank-funded road development program. Today, Access Engineering is Sri Lanka’s largest asphalt producer with a commanding market share and plants located in strategic locations island wide. 

The company’s core construction activities amounting to Rs. 12.89 billion contributed to 54.3% of the group’s consolidated revenue with construction related material contributing to 26.7% (Rs. 6.35 billion), property 2.9% (Rs. 678 million) and automobile 16.2% (Rs. 3.84 billion) during FY21.

The main local construction projects executed by the company during the quarter included the Orugodawatta Housing Project, Anuradhapura Water Supply Project, Bluemendhal Housing Project, Nanotechnology Building Project, Nittambuwa Pasyala Road Project, Stadiumgama Housing Project, i-Road project and the Elliot Place Building Project. During the quarter, the company also commenced the preliminary work of the BIA piling project and design development of the multi-story car park project at Union Place Colombo 02. 

During the fourth quarter, the company also invested in 50% of Lanka AAC Ltd., which is engaged in the production of autoclave aerated concrete blocks.

Persisting import restrictions continued to hinder the performance of the automobile sector during the last quarter. Due to the restrictions imposed on vehicle imports, the lack of new vehicle sales, which used to be the majority of the income of this sector, created a direct hit to the sector’s top bottom line. Nevertheless, the workshop operations and sale of spare parts showed a good improvement, assisting to pull through performance of the said sector. 

Capital Heights – Rajagiriya and Marina Square – Colombo, which are the two main mix development projects of Access Engineering, performed satisfactorily during the quarter securing the intended pre-sales targets. 

At the end of the FY 20/21 Capital Heights – Rajagiriya was approximately 92% completed. The project is expected to be handed over to the owners during FY 21/22. Marina Square – Colombo is in the process of completion of structural works up to the podium levels. Access Tower I and II, which are in the business of office and commercial space leasing, experienced good occupancy rates. Despite the pandemic, this sector’s performance recorded satisfactory results. 

Access Engineering declared a second interim dividend of Rs. 0.50 per share amounting to Rs. 500 million for the year ended 31 March 2021, making the total dividend declared for the financial year Rs. 1 billion. 

As of 31 March 2021, the total asset base of the company amounted to Rs. 42.35 billion and Rs. 55.88 billion at Company and Group level respectively. The equity attributed to the owners of the company was recorded at Rs. 23.6 billion at the Group level while it was Rs. 22.4 billion at Company level. Net asset per share of the Group and Company as of 31 March 2021 stood at Rs. 23.58 and Rs. 22.4 respectively.  

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