August 15, 2023

Berger Paints Jamaica Limited (BRG) for the six months ended June 30, 2023, reported a 5% increase in Revenue from contracts with customers totaling $1.46 billion compared to $1.39 billion in the corresponding period last year. Revenue from contracts with customers for the second quarter had an 11% increase to close at $743.77 million compared to $673.09 million for the comparable quarter of 2022.

Management highlighted, “Higher costs of raw material and supply chain costs continue to negatively impact cost of goods and gross profit margins in 2023. Cost of Goods Sold (COGS) in Q2 2023 was JA$436M or 21% more than the JA$361M recorded in Q2 2022. Consumer demand across the Hardware network and Retail Channel continues to be a challenge while our Projects Channel has shown strong performances year-to-date over 2022.”

Raw materials and consumable used decreased by 2% to close at $827.58 million (2022: $842.28 million), while Employee benefits expense also decreased by 2% from $272.33 million in 2022 to $265.61 million in the period under review. Manufacturing expenses totalled $33.50 million for the six months, a 33% increase over the prior period.

Other operating expenses rose by 46% to total $423.20 million relative to the $290.18 million reported a year prior. As a result, total expenses for the six months ended June 30, 2023, amounted to $1.59 billion, a 16% increase relative to $1.37 billion reported in 2022. BRG noted, “The increases were related to repairs and maintenance executed for both plant and machinery, inclusive of new equipment installation, and general building maintenance. In addition, increased utilities and costs related to technical support for upgrading of Human Resource Information Systems (HRIS) and implementation of our new Customer Relationship Management (CRM) platform. These costs are all geared towards delivering an improved performance in 2023.”

Loss before Taxation for the six months ended June 30, 2023, amounted to $131.87 million, relative to Profit before Taxation of $24.53 million reported in 2022. Loss before Taxation for the second quarter amounted to $93.07 million (2022: Profit before taxation of $1.82 million).

Taxation credit for the six months ended June 30, 2023, reached $8.99 million (2022: Taxation charge of $3.23 million). Net Loss for the six months amounted to $122.88 million compared to Net profit of $21.31 million reported in 2022. For the second quarter, Net Loss was $87.48 million (2022: Net profit of $4.21 million).

The Company highlighted, “As outlined in our last Directors’ Statement, additional charges were anticipated over Q2 and Q3 as additional costs will be incurred to improve our operations and performance for the long-term future.”

Consequently, Loss Per Share for the six months amounted to $0.57 (2022: EPS: $0.10), while Loss Per Share for the quarter totaled $0.41 (2022: EPS of $0.02). The twelve-month trailing LPS was $0.67, and the number of shares used in these calculations was 214,322,393.

Notably, BRG’s stock price closed the trading period on August 14, 2023, at a price of $7.57.

Balance Sheet Highlights

The company’s assets totalled $2.33 billion (2022: $2.36 billion). The marginal decline in assets reflected a $131.86 million decline in Post employment benefits to total $81.11 million.

Shareholder’s equity was $1.10 billion (2022: $1.32 billion), representing a book value per share of $5.14 (2022: $6.16).

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