Berger paints reports 21% decline in profit

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By Kayode Tokede

Berger Paints plc has reported 21 per cent decline in its first quarter unaudited result and accounts for the period ended March 31, 2020.

The results to the Nigerian Stock Exchange (NSE) showed N66.5million reported in Q1 2020 from N84.4million reported in 2019 while profit before tax dropped by 21 per cent to N97.79million in Q1 2020 from N124.2million reported in Q1 2019.

Despite reporting significant increase in revenue, the company increasing cost of sales and finance cost eroded profits in the period under review.

Specifically, revenue gained 35 per cent to N1.08billion in Q1 2020 from N797.6million reported in

Q1 2019.

Berger Paints in the period reported N617.76million cost of sales in Q1 2020 from N416.6million reported in Q1 2019 while finance costs moved to N20.17million in Q1 2020 from N4.44million reported in Q1 2019.

Last year, the paints manufacturing company had embarked on transformation initiatives to enhance its market dominance for the next 60 years.

The transformation initiative, which cover the company’s structure, people, processes and digital operations, have been endorsed by the company’s directors.

Addressing the elated shareholders at the company’s Annual General Meeting (AGM) in Lagos, the Chairman, Mr. Abi Ayida, explained that on assumption of office, and after due consultation with the various units of the company and meetings with the relevant stakeholders, it was imperative for the company to re-position for global competitiveness and sustainable increase on return on investment (ROI).

“On assumption of office, I solicited views on how this required journey could be made, and attained unvarnished narrative of what we as employees, partners, stakeholders and leaders were doing well and what not so well .The outcome of these valuable sessions, after Board review and consideration, confirmed that there was significant headroom for improvement in our people, processes and organisational structure” said Ayida.

Ayida stated that in order to put the company on the path of sustained profitability, the Board had created the office of Chief Operating Officer to drive the operations and technical aspects of the business while Mr. Anjar Sircar has been appointed the new Managing Director to take charge of strategic business development decisions and marketing function of the company.

Until his appointment, Sircar was the Chief Executive Officer of the Elite Group of Companies, Bangladesh. Sircar, an astute professional, who has wide and varied industry experience internationally was a member of the Executive Committee of Nepal India Chamber of Commerce and Industries ( NUCCI) and India Nepal Business Forum.

Speaking on the corporate strategy, he noted that the key anchor were a clear and integrated customer-focused global strategy, an innovative business model, organisation restructuring for resilience, sustainability and perpetuity, and retooled human capital and talent management.