May 19, 2020

Berger Paints Jamaica Limited (BRG) for the three months ended March 31, 2020 reported total revenues of $508.50 million, a 2% increase relative to $498.07 million reported for the comparable period in 2019.  The Company noted that, “2020 began positively with planned strategies being rolled out enabling BPJL to be ahead of prior year and budget at the end of February. As the COVID-19 pandemic rapidly ensued, March saw market activity fall dramatically by 39%.”

Cost of sales for the period totalled $260.26 million, a marginal decline of 0.34% relative to the $261.14 million booked in 2019. Of this:

• • There was no ‘Changes in inventories of finished goods and work in progress’ relative to a loss of $13.56 million for the first quarter of last year.
  • Raw materials and consumables rose 5% to close at $260.26 million (2019: $247.58 million).

The Company reported other income of $254,000 a 49% increase from the $171,000 reported last year.

The Company recorded a 26% growth in operating expenses to $290.49 million (2019: $231.45 million). Management noted that, “the increase in operating expenses resulted from budgeted revenue initiatives in support of our corporate plans to strengthen business fundamentals. Included are significant one-off costs associated with marketing and advertising and organizational restructuring activities, which are all tied into our long-term vision.” Of total operating expenses:

• • Depreciation costs totaled $18.45 million (2019: $8.07 million).
  • Manufacturing expenses totalled $18.51 million (2019: $18.83 million), a 2% decline year over year.
  • Employee benefits expenses climbed 7% to $141.78 million (2019: $132.91 million).
  • Other operating expenses rose 56% to $111.75 million relative to the $71.65 million recorded in 2019.

Consequently, operating loss for the period amounted to $41.98 million, when compared with an operating profit of $5.65 million recorded for the comparable period in 2019.

For the three months ended March 31, 2020, there was no finance cost however for the comparable quarter last year, finance cost amounted to $376,000.

As such, loss before tax for the quarter ended March 31, 2010 amounted to $41.98 million, relative to a profit before taxation of $5.28 million reported for the comparable period in 2019.

There was no taxation charge booked for the three months ended March 31, 2020 relative to a taxation charge of $1.32 million booked for the corresponding period last year. Consequently, net loss for the three months ended March 31,2020 totalled $41.98 million when compared with a net profit of $3.96 million reported for the corresponding period in 2019.

Consequently, loss per share for the three months ended March 31, 2020 amounted to $0.20 relative to an earnings per share of $0.02 the same quarter last year. The trailing twelve months loss per share amounted to $0.08. The total number of shares used in the calculations amounted to 214,322,393 units. Notably, BRG’s stock price closed the trading period on May 18, 2020 at a price of $14.00.

BRG stated that, “Although our positive YTD position at the end of February versus prior year has been eroded, the net impact to the first Quarter’s position is aligned to our budgeted expectations based on strategic investments as outlined above.”

Balance Sheet Highlights:

The Company, as at March 31, 2020 recorded total assets of $1.997 billion, an increase of 10% when compared to $1.82 billion recorded last year.

Total Stockholders’ equity as at March 31, 2020, closed at $1.07 billion, a 7% decrease from $1.14 billion for the corresponding period last year. This resulted in a book value per share of $4.98 compared to the value of $5.34 as at March 31, 2019.