Access Engineering 2Q propelled by construction and real estate

Access Engineering PLC reported some robust financial performance in the three months to September as the group rode on construction, infrastructure development and the real estate sector ascent which got off defying the pandemic induced challenges that affected many economic sectors. 

The construction major and the leader in civil engineering reported earnings of 64 cents a share or Rs.643.6 million in the July - September quarter on revenues of Rs.9.09 billion, up by 21.7 percent and 41.6 percent respectively from the comparable period last year. 

For the six months ended in September, the group reported earnings of Rs.1.19 a share or Rs.1.19 billion, up 96.5 percent from the same period last year. 

The performance was supported by its construction, construction related materials and property segments while the automobile segment with its Sathosa Motors PLC had dismal performance due to prolonged restrictions on vehicle imports. 

The group’s core construction segment reported revenues of Rs.8.4 billion in the six months, up 25.4 percent from a year ago period as the company listed a slew of government projects it currently engages in composing of roads, flyovers, housing and other buildings. This segment generated an operating profit of Rs. 927.4 million, up 21 percent from a 
year ago.    

The group saw its construction materials segment revenues rising over three times to Rs.6.62 billion from the same period last year due to sales of asphalt and ready mix concrete. This segment generated operating profits of Rs. 709.5 million, compared to Rs.232.7 million in the comparable period last year. 

The group remains upbeat about the future trajectory of this business given the massive road development projects launched by the present government. 

“The rural road network expansion project, as well as ADB and World Bank-funded road development programmes, are driving up demand for construction materials,” the company said in a statement.  “Expansion of the expressway network, including Central and Ruwanpura expressway developments and the elevated road network are expected to create more demand for construction material in future”, the company added. 

The company is now one of the largest asphalt and concrete producers in the market and it recently built more capacity in asphalt production with the commissioning of new plants in Ganewalpola and Mathugama. 
Meanwhile, the group’s property segment generated revenues of Rs.405 million compared to Rs.355.1 million a year ago on “above average”, sales, the company said. 

The group’s two ongoing real estate projects - Capital Heights Rajagiriya is expected to be handed over to the owners by the end of 2021/22 financial year, while Marina Square having completed up to podium level in all the buildings, is in superstructure construction stage.

The group’s iconic Access Towers I and II had maintained higher occupancy levels for office and commercial space through September. 

This segment generated an operating profit of Rs.259.9 million, up 22.4 percent from a year ago.

The automobile segment generated revenues of Rs.1.99 billion and operating profits of Rs.50.8 million, compared to Rs.2.71 billion and Rs.67.8 million respectively in the year ago period. 

Employees’ Provident Fund has 2.05 percent stake in Access Engineering being its twelfth largest shareholder.