Berger Paints Nigeria posted a pre-tax profit of N122 million in the first half of 2024, representing a 72% year-on-year decline from the N439.7 million pre-tax profit posted in the corresponding period in 2023.
During the period, the company recorded a revenue of N4.96 billion, marking a 40% appreciation from the N3.55 billion revenue posted in H1 2023.
The company’s net profit during the half-year was about N82.9 million, marking a 72% decline from the N299 million net profit posted in H1 2023.
According to the company’s financial statements for H1 2024, there was a 129% YoY growth in the company’s selling and distribution expenses to N303.7 million, from N132.4 million in H1 2023.
Key Highlights H1 2024 vs H1 2023
- Revenue: N4.96 billion, +40% YoY
- Cost of sales: N3.53 billion, +49% YoY
- Gross profit: N1.43 billion, +21% YoY
- Operating profit: N136 million, -69% YoY
- Net finance income: -N14.0 million, -926% YoY
- Profit before income tax: N122 million, -72% YoY
- Profit for the period: N82.9 million, -72% YoY
- Earnings per share N0.29, -72% YoY
- Total assets: N7.29 billion, +10% YoY
Commentary: During the period, inflationary pressure had a significant effect on the company’s books, as its operating expenses appreciated by 67% year-on-year to N1.33 billion, from N795 million as of H1 2023.
The company’s distribution expenses surged to N222.8 million in the first half of the year, marking a 106% year-on-year increase from N108.1 million in H1 2023. This spike is attributed to the rising fuel prices.
Its office and corporate expenses also increased by 173% to N158 million during the half-year from N58 million as of H1 2023. The company’s employee expenses also appreciated by 47% YoY during the period to N563.3 million, from N382.4 million as of H1 2023.
The company has also been hit by the high interest rate opening environment in Nigeria, as its interest expenses on borrowings hit N21.5 million during the period, in contrast with N667,000 from H1 2023. It recorded no FX loss during the period, a reflection of its net-zero FX exposure.
The company’s inventories at the end of the period under review were N2.97 billion, reflecting a 117% year-on-year growth from N1.37 billion as of H1 2023.
The bulk of the inventory was raw and packaging materials, with N2.1 billion, in contrast with N955.8 million at the end of H1 2023.
The cost of raw and packaging materials, as well as changes in finished products and products in process consumed during the period and accounted for in the cost of sales, totalled N3.2 billion during the six-month period.