Growth in earning drops for budgetary restrictions

Berger Paints Bangladesh Limited has gained 23.49 per cent growth in earning in the first quarter of 2022 while it was 30 per cent during the corresponding period in the previous year.

Berger Paints was unable to meet the two requirements to be eligible for corporation tax benefits in the budget of FY2022–23.

As a result, Berger Paints had to pay the government corporate tax at the fixed tax rate from the previous year.

According to its financial statement, its consolidated earning per share (EPS) at the end of June was Tk19.87, the highest over the last 5 years.

Earlier, Berger Paints EPS was Tk16.09 in 2021, Tk2.48 in 2020, Tk11.12 in 2019 and Tk7.39 in 2018.

However, the company recently in the filing with the DSE said due to higher payouts to suppliers and tax obligations compared to cash received, the company’s net operating cash flow per share (NOCFPS) remained negative.

Its Consolidated NOCFPS was Tk0.26 for April-June 2022 against Tk1.24 for April-June 2021.

Berger Paints Secretary Khandker Abu Jafar Sadique told the Business Post on Tuesday that 5 per cent of their shares had been offloaded in the capital market.

But in the budget, provision has been made to offload 10 per cent of shares to get a corporate tax benefit. “This compelled us to pay tax at earlier rates.”

Besides, when the transaction limit crosses Tk36 lakh, it should be processed through the bank.

“Our fiscal year begins in April and the budget comes into effect in July. As a result, it was not possible for us to fulfill the conditions of the budget. Our annual revenue is more than 3000 crore rupees. A lot of process changes have to be made to complete such a huge amount of transactions through banks. Initiatives are underway to implement it.

Berger Paint’s consolidated revenue increased by 30 per cent to Tk685.64 crore and its net profit increased by 23 per cent to Tk92.15 crore in the first quarter.

At the Dhaka Stock Exchange at the end of the day on Thursday Berger’s share price was 0.95 percent higher at Tk1, 804.30 per share (DSE).

Currently, Berger is the market leader in the coating industry with over 65 per cent share.