There is a huge about-turn in profit at Berger Paints with $48 million generated in the first quarter of March 2024 compared with a loss of $35 million in the first quarter of 2023, following a 7.6 percent climb in sales to $772 million from $718 million in 2023.
Cost control and reduction in some cases played a major role in the turnaround in the operations, with the company reporting a small loss for the fiscal year 2022 and a much bigger $218 million loss in 2023 after a tax credit of $37 million.
The most major development is a sharp fall in the cost of material used in the production to facilitate sales with a drop to 43 percent from 57 percent with costs of $330 million in the latest quarter down from $407 million in 2023, a fall of 19 percent while other manufacturing costs coming in 12 percent lower to $14 million.
Staff cost rose 12 percent to $154 million from $138 million in 2023 while Other operating expenses jumped 17 percent to $212 million from $180 million in 2023. Depreciation rose 16 percent to $22 million from $19 million in 2023, with fixed assets net of depreciation jumping to $480 million from $289 million at the end of March 2023.
The operations generated Gross cash flow brought in $80 million, netting out at $69 million after working capital and capital spending.
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Current assets ended the period at $1.7 billion inclusive of trade and other receivables of $595 million, cash and bank balances of $224 million. Inventories were reduced by $200 million to $800 over the twelve months to March this year and receivables by $170 million over the same period to $600 million.
Current liabilities ended the period at $1.17 billion. Net current assets ended at $500 million.
At the end of March, shareholders’ equity amounts to $1.1 billion with little borrowings.
Earnings per share for the quarter was 23 cents. IC Insider.com computation projects earnings of $1.60 per share for the fiscal year ending December 2023, with a PE of 3.4 times the current year’s earnings based on the price of $5.50 the stock traded at on the Jamaica Stock Exchange Main Market. Net asset value ended the period at $5.12 with the stock selling at a mere 7 percent over book value.
