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Berger International Limited Revenue Increases by 6.6%

Published on 2005-07-25. Author : SpecialChem

Berger International Limited (BIL), the Singapore based subsidiary of Asian Paints (India) Limited (APIL) has announced its results for the six months ended June 30, 2005. BIL is listed on the Singapore stock exchange and is the largest contributor to the overseas turnover of APIL. BIL has no operations in India.

For the six months ended June 30, 2005, the total revenue of BIL increased by 6.6 % to S $ 60.23 million (INR 1553.46 mn*) as compared to S $ 56.53 million (INR 1457.83 mn) for the previous corresponding period. Adjusted for the divestment in Malta and the exchange rate impact, the value sales growth is 10.4%. Revenue from the paints business increased by 5.1 % to S$ 53.13 mn (INR 1370.27 mn) from S$ 50.53 mn (INR 1303.22 mn). Gross margin has declined by 2.2 % to S $ 22.34 million (INR 576.17 mn) from S $ 22.85 million (INR 589.38 mn). The gross margin has declined primarily due to the steep increase in material costs which have risen by around 4% during the period under review. Material cost of paint as a percentage to paint sales has increased to 58.5 % as compared to 55.3% for the previous corresponding six-month period. Various initiatives have been taken to improve efficiencies and reduce the impact of increasing input costs.

Loss before income tax & minority interest was S$ 0.68 mn (INR 17.64 mn) as compared to profit before income tax and minority interests of S $ 0.98 mn (INR 25.35 mn) for the previous corresponding period. Net loss attributable to the shareholders of the company was S $ 1.86 mn (INR 48.20 mn) as compared to a profit for the previous corresponding period of S $ 1.01 mn (INR 26.18 mn). Provision has been made in the current period for S$ 911,929 (INR 23.52 mn) in respect of a notice for additional assessment received from IRAS for the years of assessment 2000 to 2004.

The company is in the process of filing an appropriate appeal. A provision to this effect has been made in the financials for the period ended 30 June 2005.It must also be noted that the profit for the previous period included an extra ordinary item of income of S $ 0.5 mn (INR 12.89 mn) arising out of the disposal of the group's stake in Malta. All the above has resulted in the company suffering a loss for the six month period ended June 30, 2005.

"The overall sales growth is in line with our targets. The Caribbean and Middle East region recorded an improved performance. But the overall profitability has been a bit disappointing due to the high income tax provision, increased losses from the associate company in Philippines and also to an extent the poor performance of the East Asia region. However we have continued with our strategy of gaining market share by minimizing price increases and undertaken initiatives in various markets to increase the top line. Installation of dealer tinting systems has been extended to the East Asia region. New products have been introduced in many markets. With the launch of new products, certain low value products have been dropped from the product portfolio. These initiatives have helped units move up the value chain and commence supplies to large retailers who were earlier not dealing with the group." mentions Mr. Jalaj Dani Chairman, Berger International Limited.

The profits from operations of the Caribbean region are substantially better than the previous corresponding period. The performance of the Barbados and Trinidad subsidiary has improved considerably while the subsidiary in Jamaica has performed satisfactorily. The Middle East region has also performed well. The subsidiary in Bahrain has commenced exports to Saudi Arabia and continues to perform well in the domestic segment. It continues to be the main contributor to the good performance of the region. The subsidiary in UAE has taken steps to consolidate its retail presence and improve profitability of the export segment. The operating profits of both the subsidiaries in the Middle East are higher as compared to the previous period. In the East Asia region, the subsidiary in Thailand has introduced dealer tinting systems and new products which have been well accepted in the market. The Thailand subsidiary has also strengthened its sales infrastructure to promote its products. There has been a healthy increase in sales but costs incurred to gain market share have resulted in operating losses. The subsidiary in Singapore has recorded satisfactory sales performance, but operating profits are lower.

About Berger International Limited (BIL)

The Berger International Limited group which is listed on the Singapore stock exchange has manufacturing presence in 10 countries across the world viz Singapore, Malaysia, Thailand, Myanmar, China, Bahrain, Trinidad & Tobago, UAE, Jamaica and Barbados. BIL has exclusive rights to the Berger brand in over 70 countries. Established in 1760, 'Berger' is one of the oldest brands in the paint industry. BIL was incorporated on 3 December 1993 as a private limited company and was thereafter converted into a public company in 1994. In November 2002, Asian Paints, Asia's fourth largest paint company acquired controlling stake in the company.

Source: Asian Paints (India) Limited (APIL)

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