Company profile

Berger Paints posts 13pc sales growth

Babul Barman | Published: July 19, 2018 10:34:59 | Updated: July 20, 2018 10:22:29


Berger Fosroc Limited, a joint-venture company of Berger Paints Bangladesh and UK-based construction chemical manufacturer Fosroc International with equal stakes, is set to start commercial operation soon.

The US$ 6.30 million joint-venture company has a plan to double the investment in next four years.

The new entity aims to provide a "superior constructive solution" for durables and sustainable quality of infrastructure projects as the consumers expect quality residences in line with the economic development.

The products include industrial adhesives, admixtures, grinding aids and joint sealants while the services will encompass concrete repairs, industrial flooring, grouting and anchoring, surface treatment and waterproofing.

The local demand for the products has been increasing rapidly over the last five years, but was being met with imports due to absence of local production, said Rupali Chowdhury, Managing Director of Berger Paints Bangladesh.

By bringing the products into the market, Berger Paints will become pioneers in this sector, she said, adding that the new venture would create 150 direct and 3,000 indirect jobs.

Berger is a global manufacturer of paints and its Bangladesh wing has an annual turnover of around $240 million, registering a sales growth of 13 per cent growth for the year ended on March 31, 2018.

The company's consolidated sales stood at Tk 16.53 billion for the year ended on March 31, 2018 which was Tk 14.64 billion in the previous year, according to its latest annual report.

Officials said the growth in sales would be satisfactory considering the market conditions.

However, the company's net profit fell to Tk 1.78 billion, registering a decline of 6.80 per cent over the previous year's Tk 1.91 billion.

The company's net profit fell due to higher cost of raw materials coupled with devolution of the local currency against US dollar, said an official.

He said that they did not seek a price increase to offset the rising material costs and in fact increased their promotional and marketing spending.

"This was done to combat the intense competition and to support our strategy of gaining the market share," he added.

The company's annual general meeting (AGM) was held on Tuesday where the shareholders approved 200 per cent cash and 100 per cent stock dividend for the year ended on March 31, 2018.

The shareholders also approved increasing the authorised capital to Tk 1.0 billion from existing Tk 400 million.

After listing with the Dhaka bourse in 2006, Berger Paints Bangladesh approved stock dividend for the first time.

"For a long time, stock dividend was a request from our general investors. This time, we met their request," said Rupali Chowdhury.

The company has also reported consolidated earnings per share (EPS) of Tk 77.10, consolidated net asset value (NAV) per share of Tk 284.11 and consolidated net operating cash flow per share (NOCFPS) of Tk 63.33 for the year ended on March 31, 2018 as against Tk 82.58, Tk 249.51 and Tk 87.69 respectively for the same period of the previous year.

The company also disclosed April-June, 2018 quarter earnings on Wednesday.

As per the April-June quarter earnings, EPS fell to Tk 14.78 as against Tk 18.40 for April-June in 2017.

Each share of the multinational company closed at Tk 1,276.80 on Wednesday at the Dhaka bourse, losing 2.72 per cent over the previous day.

The company's paid-up capital is 231.88 million, authorised capital is Tk 400 million and the total number of securities is 23.18 million.

Sponsor-directors own 95 per cent stake in the company while institutional investors 1.66 per cent, foreign investors 1.57 per cent and the general public 1.77 per cent as on June 31, 2018.

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