BERGERPBL: 3QFY23 Earnings Update

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.

Net revenue (BDT mn)      6,2936,563     16,078      18,907
Gross profit (BDT mn)      2,1381,776      5,505        5,481
EBIT (BDT mn)      1,150867      2,797        2,829
NPAT (BDT mn)         812683      2,002        2,048
EPS (BDT)      17.5214.73      43.18        44.16
BVPS (BDT)     238.45258.91     238.45      258.91
Growth YoY    
Gross profit34.0%27.1%34.2%29.0%