Counter measures working to improve revenues

Durrant Pate/Contributor

Having grown sales in the last quarter, Berger Paints Jamaica Limited is anticipating bumper sales during the upcoming holiday season.

Company Chairman, Adam N. Sabga is projecting that the current December quarter is set to be an “an exceptional sales period” and is looking forward to a strong finish at year end.

“As we approach the quarter four peak period, we have activated promotional campaigns that will reward our loyal customer and create traction in the market,” Sabga advised.

While this is being done, the management is actively working on procurement to improve its margins, as well as internal efficiencies to improve service delivery.

For the September quarter, Berger saw a 14 per cent rise in revenue, which increased to J$789 million, up from the J$696 million for the corresponding quarter in 2021.

The company chairman reports, “measures taken to counter the current macro-economic conditions and supply chain challenges contributed to revenues coming in stronger across all channels during the review period in Q3 2022 versus Q3 2021″.

Inputs cost going up

However, despite this positive trend, inputs to operations have continued to be affected by the ripple effects of the COVID-19 pandemic and compounded by the effects of the Russia/Ukraine war. This has increased cost of goods sold and impacted gross profit margins.

During the September quarter, Berger experienced challenges with its production lines that resulted in less production when compared to the same period last year. This would have impacted the company’s absorption costs and further impacted margins.

As a result, costs associated with raw materials/consumables and changes in inventories for Q3 2022 totalled J$464 million, an increase of J$127 million above the J$337 million recorded in the comparative quarter in 2021. Cash was prudently managed and came in seven per cent lower than prior year, same period.

Marginal rise in profit

Pre-tax profit came out at J$1.1 million for the quarter compared to the J$36.7 million booked during 2021. Berger’s performance for the nine months ending September 30, 2022 delivered $25.6 million in pre-tax profit compared to J$46.7 million for the corresponding period in 2021.

Berger continues to be supported by a strong balance sheet that supports its growth agenda. The management reports that “2022 continues to be a challenging year due to macro-economic factors, high inflation levels and the impact to disposable income.”