Berger Paints Bangladesh Limited (BRGR BD) posted 15.9% negative bottom line in 3QFY23 (October– December 2022)
· BRGR BD’s net profit declined 15.9% YoY in 3QFY23. Net profit growth is flat at 2.3% in 9MFY23.
· We view that high inflationary pressure, price hike of construction materials, and declining liquidity in the financial system affected the paint demand. Hence, the company posted flat revenue growth of 4.3% YoY in 3QFY23.
· Gross profit margin fell by ~700bps YoY in 3QFY23 due to raw material price hike and currency depreciation. EBIT margin also decreased by ~500bps to 13.2% in the relevant quarter despite 8.1% YoY decrease in Selling, Distribution and Warehousing expenses.
· NOCFPS decreased mainly due to increase in suppliers’ payments for strategic inventory build-up, advance payment made to banks and also higher payment of advance income tax at import stage.
· Effective tax rate fell to 16.3% in 3QFY23 from 27.2% in 3QFY22. Hence, net margin decreased by only 250bps.
| Particulars | 3Q’22 | 3Q’23 | 9M’22 | 9M’23 |
| Net revenue (BDT mn) | 6,293 | 6,563 | 16,078 | 18,907 |
| Gross profit (BDT mn) | 2,138 | 1,776 | 5,505 | 5,481 |
| EBIT (BDT mn) | 1,150 | 867 | 2,797 | 2,829 |
| NPAT (BDT mn) | 812 | 683 | 2,002 | 2,048 |
| EPS (BDT) | 17.52 | 14.73 | 43.18 | 44.16 |
| BVPS (BDT) | 238.45 | 258.91 | 238.45 | 258.91 |
| Growth YoY | ||||
| Revenue | 21.2% | 4.3% | 41.9% | 17.6% |
| EBIT | -13.6% | -24.6% | 15.3% | 1.1% |
| NPAT | -9.9% | -15.9% | 19.8% | 2.3% |
| Margin | ||||
| Gross profit | 34.0% | 27.1% | 34.2% | 29.0% |
| EBIT | 18.3% | 13.2% | 17.4% | 15.0% |
| NPAT | 12.9% | 10.4% | 12.5% | 10.8% |
