Industry News

Berger International Limited Revenue Rise by 18.4 %

Published on 2004-07-27. Author : SpecialChem


Singapore -- Asian Paints Singapore based subsidiary, Berger International Limited (BIL) announced its results for the six months ended June 30, 2004. Berger International Limited is the only Indian company to be listed on the Singapore stock exchange and is the largest contributor to the overseas turnover of Asian Paints (India) Limited.

For the six months ended June 30, 2004, revenues of Berger International Limited (BIL) increased by 18.4 % to S $ 56.53 million (INR 1508.68 mn*) as compared to S $ 47.72 million (INR 1273.75 mn) for the previous corresponding period. This is primarily due to the increase in volume sales of paints by 17.4 % to 16.28 million litres as compared to 13.86 million litres for the corresponding period. Profit from operations for the group has increased by 47.6 % to S $ 2.17 million (INR 57.97 mn) as compared to S $ 1.47 million (INR 39.29 mn). Profit before tax and minority interests has increased by 18.1 % to S $ 1.5 million (INR 39.95 mn) from S $ 1.27 million (INR 33.84 mn). Net profit for the year before minority interests has increased by 23.9 % to S $ 1.14 million (INR 30.45 mn) as compared to S $ 0.92 million (INR 24.58 mn). Net profit after minority interests has increased by 7.1 % to S $ 1.01 million (INR 27.09 mn) as compared to S $ 0.95 million (INR 25.30 mn)

Commenting on the results, Mr. Jalaj Dani, Chairman, Berger International Limited mentions "Being the second year after the taking controlling stake in the company, the group has focussed on sales growth through various initiatives, which includes new product introductions and increased advertising. This has resulted in volumes growing significantly in the first six months of this financial year. In this regard, the performance of the Middle East and South East Asian region has been very encouraging. Profitability for the group has also improved considerably, if one were to exclude the one time receipt of extraordinary income of insurance claim in the last year from the associate company in the Philippines."

Explanation of the Results

The group's revenue increased significantly in the first six months of the financial year as detailed marketing plans were drawn at the beginning of the year for each market coupled with the introduction of new products and dealer tinting systems in some markets along with higher expenditure on advertising and promotions. For the period ended June 30, 2004, the group achieved profit from operations of S$2.17 million (INR 57.97 mn) due to a gain of S$ 0.51 million (INR 13.6 million) arising out of the disposal of the subsidiary in Malta.

* Only for ease of conversion, 1 Sing Dollar = INR 26.69 for June 2004 & June 2003, Rate as on June 30, 2004.

The material cost for first half of the year is higher as compared to the corresponding period due to higher proportion of revenue from contracting business where profit margin is lower as well as higher proportion of revenue from the Middle East and East Asia regions where the profit margin is lower as compared to the Caribbean region. The group has been able to optimise material cost by group sourcing, formulation engineering and improving material usage efficiencies in plants and thereby reducing the impact of increasing input prices.

The higher figure of "other operating expenses" is due to higher planned advertising and promotion expenditure incurred to grow revenue. The finance cost has reduced to S$ 0.73 million (INR 19.51 mn) as compared to S$ 0.82 million (INR 21.78 mn) due to swapping of high cost debt with low cost debt. The efforts are on to further contain finance costs. Berger International Limited's ("BIL") share of profit from associate company Dutchboy Philippines Inc, in which BIL holds 30% stake is S$0.06 million (INR 1.49 million) for 1H2004 as compared to S$0.61 million (INR 16.33 million) for the corresponding period of the previous year. The higher profit for the corresponding period of the previous year is mainly due to the one-time receipt of the insurance claim arising out of the fire in the plant in 2002.

About Berger International Limited

Berger International Limited operates in 10 countries across the world viz Singapore, Malaysia, Thailand, Myanmar, China, Bahrain, UAE, Jamaica, Trinidad and Barbados. It has manufacturing facilities in all these countries. Incorporated on 3 December 1993 as a private limited company, BIL was 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

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