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Berger Paints promises growth as Fx scarcity reduced Q1 profit

Berger Paints Nigeria Plc. has promised their shareholders improved returns on their investments by the end of the year despite the drop in their financial performance for the first quarter (Q1) ended March 31, 2016 to foreign exchange scarcity (FX).

The Premier paints company in Nigeria said it is hopeful of increased profitability by leveraging on its soon to be commissioned first automated paint manufacturing plant in Sub-Sahara Africa that would reduce production costs, reduce response times, improve their product quality and make them compete favourably with imported brands.

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The Managing Director and Chief Executive Officer, Berger Paints, Mr. Peter Folikwe disclosed this to stockbrokers at the presentations of the company’s facts behind the figures on the floor of Nigerian Stock Exchange in Lagos.

Folikwe said though revenue increased by Eight per cent (N54m) from N706 Million in Q1 2015 to N760 Million in Q1 2016, Operating Profit fell 72 per cent (N79m) from N109 million in Q1 2015 to N31 million in Q1 2016.

He said the decline was as a result of; “margin drop largely as a result of increase in raw material prices, scarcity of foreign exchange as we have to largely resort to local sourcing of raw materials at exorbitant price and the general lull in economic activities due to the delay in passage of 2016 budget”.

For the second quarter 2016 financial forecast, he said they are targeting N1.014 billion revenue and profit after tax of N111 million.

The Chairman,Berger Paints, Dr Oladimeji Alo said despite the first quarter result, the company intends to reclaim its first position in the market through aggressive drive and investments in their leading brands, increase in marketing activities to gain visibility and renewed evolvement of their route to market capabilities to drive aggressive sales.

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Alo asserted that with the passage of ‘budget of change’ that focus more on capital project as against recurrent, they hope to leverage on businesses in the building and construction industry of the economy to record better performance in the years to come.

“We are preparing Berger Paints for the future, we are spending on marketing now thereby putting the brand on the minds of our customers and also supporting our business partners that we outsourced our depots that is spreading across the country”, he added.

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