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Profits surge 50% in July-September period
Berger Paints saw its profit soar 50 per cent between July and September to Tk 66.1 crore on the back of pent-up demand from the preceding three months, which was more or less a washout thanks to the countrywide shutdown to flatten the curve on coronavirus.
This takes the company’s profits in the first half of its 2020-21 financial year, which runs from April to March, to Tk 76.9 crore, down 19.6 per cent year-on-year.
“Like other organisations, this pandemic caused huge financial damage to us,” said Rupali Chowdhury, managing director of Berger Paints Bangladesh.
Bangladesh announced its first confirmed cases of COVID-19 on March 8 and three weeks later, the government put the country on shutdown, bringing economic activities to a screeching halt.
Paints being a discretionary product was among the worst hit during the shutdown.
The shutdown was lifted on May 30 and with it seems the demand for paint returned gradually.
Between April and June, the country’s leading decorative paint manufacturer logged in sales of Tk 71 crore.
And in the following three months — which coincided with the monsoon season, when construction activities and repainting work hits the slow lane — sales stood at Tk 165 crore, up 11.5 per cent year-on-year.
Chowdhury credited the sales spurt to pent-up demand from the shutdown period.
“Consumers could not place orders or buy during the shutdown. Besides, infrastructure works were on hold. They bought our products in the July-September period,” she added.
With social distancing becoming the norm, households were reluctant to immediately allow painters in.
To get around this predicament, the Indian paint manufacturer — which has a 52 per cent market share in Bangladesh, according to a research of LankaBangla Investments — rolled out disinfection services and hand sanitisers.
Called Berger Mr Expert Advanced Hand Sanitiser, the product, which is manufactured by following the formulation of the World Health Organisation, comes in a 250ml bottle and carries a price tag of Tk 180.
Its disinfection service, called the Berger Expert Sanitisation Service, provides up to four weeks of protection against virus and bacteria.
The service cost is Tk 3.50 per square feet if the premise is less than 5,000 square feet. It is Tk 3 for premises between 5,000 and 10,000 square feet. The service charge is Tk 2.5 when the premise is larger than 10,000 square feet.
The company is also working to come up with a product with an anti-microbial coating that will protect against viruses.
“Berger is continuously assessing customers’ requirements, and consequently, we will develop our strategies prioritising their needs and market evolution,” Chowdhury said.
The second quarter showing though failed to cheer the market: its stock gained 2.9 per cent since the results were disclosed on October 29. Yesterday, shares of Berger Paints, which got listed in 2006, closed at Tk 1,361.3.
Its consolidated earnings per share, which is its profit divided by the outstanding shares of its common stock and serves as an indicator of its profitability, was Tk 16.6 in for the first half of the financial in contrast to Tk 20.6 a year earlier.
The company was disbursed 295 per cent cash dividend for its financial year that ended on March 31, up from 250 per cent a year earlier.
Earlier this year, Berger Paints announced its plan to invest Tk 91.5 crore to set up its second plant to manufacture tin containers and print tin sheets to meet the growing demand. The plant is expected to be complete in 2022.
Globally, there are expectations that in the post-COVID world, increased focus on hygiene will drive more frequent repainting than seen in the past. Paints usually have a life of five years before they start becoming dull.
The investment plan for the second plant, perhaps, is in keeping with the increased demand.
(DT)
