Africa-Press – Eswatini. The Construction Sector has reported an incline in revenue despite a surge in projects. A recent survey by the Ministry of Economic Planning and Development (MEPD) in collaboration with the Central Bank of Eswatini titled Annual Company report 2023 has revealed that industry statistics show a healthy increase in project registrations while major construction firms reported declining revenue and profits in the review period.
According to the report, three companies and the regulator were surveyed under the construction sector in the period under review and all three companies reported poor performance in the period owing to the completion of several major projects, particularly those under government.
It therefore highlighted that this led to a downward trend in revenue and profit margins.
The report noted that the sector regulator, however, reported an increase in subscriptions and registration fees, indicating improved compliance by industry players.
Despite the challenges faced by established companies, the report highlights that industry statistics painted a different picture as project registrations increased from 224 in 2021 to 326 in 2022, reflecting increased compliance by industry players.
In terms of industry performance, there were several projects implemented in 2022, cutting across both the public and private sector, and classified under building, civil, artisans, mechanical and electrical works. Looking forward, the surveyed entities expressed optimism for the short-to-medium term.
“The outlook for the industry is broadly positive, as all surveyed entities reported positive prospects in the short-to-medium term. Earmarked projects in the short term include road construction, water projects, dams construction, and buildings amongst others,” reads the report.
The report further painted a promising future for the wholesale & retail sector which comprises of car dealerships, fuel retailers, supermarkets, wholesale & retail of construction material, and pharmaceutical products
It stated that out of 12 surveyed companies, half reported positive performance, fuelled by local demand and product expansion.
“The sector was represented by a total of 12 companies, of which six companies recorded positive term, the subsector remained optimistic that positive performance would be sustained, largely benefiting from increasing local demand and product diversification to include motorcycles and electric cars,” it reads.
All six companies reported revenue amounting to E2.43 billion in 2022, reflecting a growth of 31.8 per cent, with the fuel sub-sector accounting for 57.7 per cent of the revenue.
The survey was further conducted with three companies in the wholesale of fuel revealing that on average, the sub-sector recorded an increase in volume sales due to higher demand, mainly from commercial activities.
“This was particularly from coal transportation coupled with support from SA depots which boosted supply,” reads the report.
However, one company in the sub-sector reported a decline in fuel volumes due to supply constraints.
“The developments in fuel volumes supported revenue growth for two (2) companies that recorded growth in volumes, whilst the other company that had a decrease in volumes also recorded a decline in revenues,” reads the report.
All surveyed fuel retailers reported squeezed profits due to high costs they couldn’t fully pass on to customers due to price regulations.
However, planned expansions and a potential easing of fuel import restrictions offer hope for the future.
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