Access Engineering ups 3Q profit by 141% to Rs. 691 m

• First 9 months performance up 19% to Rs. 1.26 b; construction resilience helps faster recovery despite COVID-19 pandemic

Access Engineering PLC (AEL), the country’s premier listed civil engineering company, has recorded an impressive after-tax consolidated profit of Rs. 691 million for the third quarter reflecting a 141.3% increase from a year earlier.

Group after tax profits for the nine months stood at Rs. 1,268 million up 18.7% from the corresponding period of FY20.

In a statement AEL said the 3Q performance indicates a faster recovery and bouncing back of operations amidst the COVID-19 pandemic. 

At Company level the 3Q saw after tax profits rise by 36.4% to Rs. 559 million.

AEL said the significant margin improvement was despite the key sectors recording revenue decreases during the quarter, except sale of construction related materials. 

Core construction activities, property sector and the automobile sector recorded YoY decreases in revenue during the quarter amounting to approximately 15%, 14% and 48% respectively. Nevertheless, this decrease was offset by a whopping 143% growth in the sale of construction related material during the quarter. 

The company’s core construction activities amounting to Rs. 8,654 million contributed to 53.5% of the group’s consolidated revenue with construction related material contributing to 23.7% (Rs. 3,827 million), property 3.1% (Rs. 504 million) and automobile 19.7% (Rs. 3,176 million) during the nine-month period. 

Growth in construction-related material was primarily attributed to the sale of asphalt concrete followed by ready mix concrete. 

AEL is one of Sri Lanka’s largest asphalt producers with a commanding market share and an island wide coverage. During the quarter, the company made further investments in asphalt plants to cater ever increasing demand for asphalt due to road and highway network development in the country.

Main local construction projects executed by the company during the quarter included the Mannar Wind Power Project, Anuradhapura Water Supply Project, Bloemendal Housing Project, Nanotechnology Building Project, Central Expressway Project, CAMSO Load Star Warehousing Project, Nittambuwa Pasyala Road Project, Stadiumgama Housing Project, iRoad project and the recently commenced Elliot Place Building Project. 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. 

AEL said the performance of the automobile sector was hampered by the import restrictions that were in place during the quarter. This had a significant impact on the sale of new Isuzu vehicles. Nevertheless, the workshop operations and sale of spare parts showed a marginal improvement resulting in better margins for the two sectors. Amidst a slowdown in new vehicle sales, margins of this sector were eroded too, AEL added.

The company’s two real estate projects performed well during the quarter with healthy pre-sales backed by the low interest regime. While Capital Heights Rajagiriya is nearing its completion, Marina Square achieved its third construction milestone during the quarter. Access Tower I and II experienced a good occupancy too. 

AEL’s gross profit for the quarter was recorded at Rs. 1.23 billion and Rs. 907 million at Group and Company level respectively with corresponding margins of 20.3% and 13.6%. For the cumulative period gross margin was recorded at 17.3% and 12.6% at Group and Company level respectively. 

As at 31 December 2020, the total asset base of the company amounted to Rs. 51.98 billion and Rs. 40.11 billion at Group and Company level respectively. The equity attributed to the owners of the company was recorded at Rs. 22.6 billion at the Group level, while it was Rs. 21.3 billion at Company level. Net asset per share of the Group and Company as at 31 December 2020 stood at Rs. 22.61 and Rs. 21.3 respectively.  

The Board of Directors of Access Engineering 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.