Construction and property development lift 3Q

Access Engineering PLC reported higher revenues and profits for the quarter ended in December 2018 (3Q19). The performance was propelled by the group’s construction business and the property development arm, the interim results showed.

Access Engineering reported earnings of 66 cents a share or Rs.659.3 million for the October – December quarter, more than doubling from the 30 cents a share or Rs.304.5 million reported for the year earlier period.

The revenues for the period also rose by 15 percent year-on-year (YOY) to Rs. 7.95 billion while the cost of sales rose by a faster 11.2 percent YOY to Rs.6.63 billion, resulting in a gross profit of Rs.1.32 billion, up 38 percent YOY.

The operating profit for the group was Rs.1.02 billion compared to Rs.496.9 million a year ago.

Meanwhile, for the nine months ended December 31, 2018, the group reported earnings of Rs.1.65 a share or Rs.1.65 billion in total profits compared to Rs.1.20 a share or Rs.1.21 billion reported for the same period a year ago, which is an increase of 36.4 percent.

The group revenue led by the construction segment was Rs. 21.6 billion, up 13.4 percent YOY.

Access group did not expect its key construction sector to maintain higher profits as the construction sector profits were subject to 28 percent tax from April 1, 2018 from a subsidized rate of 12 percent which the sector hitherto enjoyed.

During the nine months, the group’s construction sector operating profits rose to Rs.2.13 billion from Rs.1.24 billion a year ago.

The construction sector materials business of the group increased its profits to Rs.339.4 million from Rs.245.6 million a year ago.

The group’s property development unit reported profits of Rs.436.8 million against Rs.154 million a year ago. The group banks much of its future growth on the prospects of this sector.

Meanwhile, the group’s automobile business segment run by Sathosa Motors PLC and SML Frontier Automotive (Private) Limited saw a decline in operating profits to Rs.303.3 million from Rs.569.0 million, despite a slight growth in revenues.