2018/2019 has been a challenging year, specifically for those businesses supplying goods and services to the construction sector, the chairman of Lanka Aluminium Industries PLC, S.T. Nagendra said in the Annual Report and the Audited Accounts of the company for the year ended 31st March 2019.

“During the first part of the year, the negative effects of the lack of projects started during the previous financial year were quite apparent with a significant reduction in government led construction activities.”

“Private sector projects continued, albeit at a slower pace, since the demand for commercial and residential space appears to have reduced. Low economic growth in the country, estimated at around 3% and the negative growth in the construction sector attributed to this general reduction in demand for our products,” Nagendra added.

The company also experienced a severe credit crunch within the sector which made collection of debtors even more of a challenge than sales.

Furthermore, “during the second half of the financial year, a series of unforeseen & unexpected events took place and the unsettled conditions that prevailed in the country severely hampered our ability to collect dues from customers and further reduced construction activity and sales,” Nagendra added.

Hence, the group’s sales volumes reduced by 9% in 2018/2019.

Moreover, the rising interest rates, high aluminium prices and the sudden unexpected devaluation of the currency also attributed to a reduction in company’s profit before tax to Rs. 80.8 Million for the year.

“In spite of this reduced performance, we are optimistic of the future,” Nagendra said.

“The construction sector will very likely grow in the medium to long term, led by government-initiated projects, such as the Port City, the Western Province Megapolis, the relocation of displaced persons in the north, highways, etc.”

Nagendra also expects the market and general conditions to settle during the next year and this, together with an increase in tourist arrivals and related activities, will spur private sector led construction, especially affordable housing & commercial/retail space in suburban areas.

“The usage of aluminium in construction activities is ever-increasing.”

“This, together with our company’s ability to manufacture products which meet internationally accepted standards, at competitive prices, will no doubt, help us to achieve better results in the coming years”, Nagendra added.