Berger Paints Q3 profit surges

Profit before taxation soared an outstanding 524 percent for Berger Paints for the third quarter, but that was insufficient to wipe out the losses incurred in the first and second quarters, amounting to $63 million.  

Berger Paints Q3 profit jumps.

For the quarter ended September 2020, the company recorded a profit before tax of $58 million, up from $9 million for the corresponding quarter in 2019.
Taxation climbed 700 percent for the quarter from a loss of $1.8 million to $14.7 million for the quarter but dropped by 162 percent for the year from $10 million to a credit of $6 million. Net profit came in at $43 million for the quarter, a 481 percent jump over the comparative quarter’s figure of $7.4 million.
Profit after tax dropped 151 percent from $40 million to a loss of $20 million for the nine months period after-tax, losing $26 million, for the nine months to September, compared to a profit of $50 billion at the end of September 2019. Heading into the traditional festive season, Berger will be hoping to close out the fiscal year on a high note with a strong increase in the final quarter profit.
Revenue improved by eight percent for the quarter from $534 million to $574 million but fell nine percent from $1.63 billion to $1.49 billion for the nine months to September.
Direct Manufacturing expenses fell by 29.7 percent for both the quarter and the year to date, recorded at $304 million and was down 26 percent to $763 million respectively. Gross profit jumped 103 percent for the quarter from $150 million to $304 million and increased 20 percent for the year to date from $609 million to $732 million, with gross profit margins of 53 percent for the quarter, up from just 28 percent in 2019 and 49 percent for the 2020 nine months, up from 37 percent in 2019. The input in paint production is heavily based on petrochemicals as such a fall in the price of oil on the world market would result in reduced production cost for the company.
Depreciation jumped 78 percent for the quarter to $20 million and a 58 percent increase to $45 million for the year. Other operating expenses declined 8 percent for the quarter from $118 million to $108 million and saw a 25 percent rise for the year from $262 million to $327 million. Other income for the quarter stood at $7.2 million for the quarter up from just $182,000 and at $7.7 million for the year to date from $54,000 in 2019.
The company implemented new information technology last year, which the company claims are working well. “The recently deployed Enterprise Resource Planning (ERP) system has settled and has been providing Management with key insights to allow for a deeper appreciation of the business drivers and, with that, quicker decision making. Although a relatively new deployment, it is already contributing value to the business,” the Chairman, Adam N. Sabga, remarked in a statement accompanying the quarterly.
Net cash inflows generated cash of $21 million, but a reduction in amounts due to payables and fellow subsidiaries resulted in cash from operating activities was an outflow of $190 million and capital spend and loan payments increased cash outflows to $263 million. Current assets stood at $1.37 million inclusive of Inventories of $509 million, Receivables of $443 million and cash and bank balances of $306 million.  Current liabilities tallied $572 million inclusive of $126 million due to the immediate parent company and $369 million to fellow subsidiaries. At the end of September, shareholder’s equity stood at $1.1 billion.
Earnings per share came in at 20 cents for the quarter and a loss of 10 cents for the nine months to September and projects full-year earnings of $2.25 per share with a rise to $2.80 in 2021.
The stock is currently trading at $11.85 on the Main Market of the Jamaica Stock Exchange with a PE ratio of 5.3 times 2020 earnings.

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