Soaring raw material costs hit Berger Paints Q2 profit

The rising raw material prices in the international market hit the profitability of Berger Paints Bangladesh, the global paint manufacturer has said.

The company reported a decline of 33 per cent in net profit to Tk 44 crore in the July-September period from Tk 66.13 crore recorded in the same period a year earlier, according to its latest financial statement.

“The second-quarter profit fell mainly because of higher raw materials price in the international market,” said the company in its reports.

The high crude oil prices have pushed up the raw material prices Note that half of the material used by the company is crude oil derivatives.

However, the company’s revenue increased 11.63 per cent to Tk 453 crore from Tk 406 crore during the period.

Net operating cash flow per share (NOCFPS) decreased from the same period of the previous year mainly because of higher stocks maintained to ensure uninterrupted supply amidst pandemic situation as well as to carter forecasted sales in next quarter and disbursement of dealer’s annual benefit during the period, said the company.

Its NOCFPS went into negative at Tk 2.25 for July-Sep this year, which was Tk 13.20 in the same period a year ago.

However, in the first half (April-September) this year, the company's profit increased to Tk 119 core from Tk 76.88 crore during the period.

During the period, the company’s revenue stood at Tk 336.6 crore, up 42 per cent from Tk 236 crore during the period.

Berger Paints Bangladesh was listed on the Dhaka Stock Exchange in 2006. Its paid-up capital is Tk 46 crore.

On Thursday, the last trading session of the week, its share edged 0.31 per cent up to Tk 1,781 on the Dhaka Stock Exchange.

Surging input prices kept margins of the paint companies globally in the near term, according to a report.

Adding to it, global chip shortage might impact the supply of tinting machines which are the key for paint dealers, it said.

The machines help shops create several shades of paints within the store in line with the requirement of customers.