Berger Paints earns 7.1% revenue growth, recommends 40kobo dividend

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Berger Paints earns 7.1% revenue growth, recommends 40kobo dividend

 

Berger Paints Plc has posted a 7.1 percent revenue increase from N3.58 billion in 2019 to N3.84 billion in 2020 despite the negative impacts of COVID-19 on its operations.

The modest performance was driven by volume growth despite the shutdown in economic activities, disruptions, and environmental unrest, and the loss of sales for about 7 weeks in the year.

As a commitment to its policy of shareholder value, the company has recommended a dividend of 40 kobo per share, an increase of 60 percent higher than the 25 kobo paid in the previous year. and subject to the approval of its shareholders at the 2021 Annual General Meeting of the company.

The company’s regulatory filing to The Nigerian Stock Exchange shows that some of its performance indicators declined but assured the investing public of a brighter future.

The Managing Director, Anjan Sircar said the financial year ended 2020 showed modest revenue growth when compared to the 2019 results in spite of the emergence of COVID 19 and other environmental and economic unrest at various times in 2020.

He explained that the revenue growth had been largely driven by the strategic focus on the sales of premium products and the inclusion of new business partners contributed to the volume growth.

“ Berger Paints also experienced disruptions in its supply chain that presents difficulties in the purchases of raw materials and resulting in sharp increases of input costs. The challenges in sourcing for foreign exchange and the congestions at our Ports impacted on the Company’s ability to obtain raw materials at advantageous prices. However, we have taken steps to reduce similar impacts on our business in the future, including undertaking a robust review of our business continuity processes.

“ We have also adopted new business strategies and initiatives for better and improved performance in the 2021 financial year.

“ With an enviable reputation of being the first in setting standards in the paints industry in Nigeria, its Free cash flow remained strong at N529 million, representing 34 percent increase from 2019. This shows that the Company remains healthy and is still thriving in the current environment.”, Sircar said.

However, Gross profit declined by 15 percent from N1.66 billion in 2019 to N1.42 billion in 2020 with a gross margin of 37 percent. The decline, according to the firm was largely due to the impact of the COVID-19 pandemic which resulted in a global scarcity of raw materials and consequently a significant rise in the prices of raw material.

Highlights of audited financial results further showed Net finance income declined 56 percent due to the shortfall in investment income in the year and impact of the interest rates fluctuations, while Profit for the year declined 67 percent to N146.28million from N448.73million largely on the account of the decline in EBIT and finance income. EBIT at N154.05 million representing 62 percent decline from 2019.

 

This, the company said was principally due to the decline in gross profit, increased focus on health and safety in response to the COVID 19 pandemic, recruitment of key management staff, and the general rise in prices of operational purchases.

With the negative economic impact of Covid-19 on Berger Paints financials, profits before tax dropped by 62 percent to N211.85 million from N551.56 million, while Earnings per share declined by 68 percent.

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