Berger Paints Nigeria Plc has reported a 15 per cent decline in its gross profit for the year ended December 31, 2020.
According to the company’s Audited Financial Results released on Thursday, the gross profit dropped with a margin of 37 per cent from N1.66bn in 2019 to N1.42bn in 2020 .
The decline was largely due to the impact of the Coronavirus Disease, which resulted in scarcity of raw materials and consequently price hike, the company however said.
It further adduced that difficulty in sourcing forex also impacted its cost of inputs.
Its Profit Before Tax dropped by 62 per cent to N211.85m in 2020 from N551.56m posted in 2019, while its profit before income tax also fell by 60 per cent to N210.90m relative to N533.099m in 2019.
BPN’s Earnings Before Interest and Taxes also declined by 62 per cent to N194.95m in 2020 from N512.93m reported in 2019.
According to the firm, the drop in its EBIT was principally due to the decline in gross profit, increased focus on health and safety in response to the COVID-19 pandemic, recruitment of key management staff and general rise in prices of operational purchases.
The company’s 2020 financial result also showed that net finance income declined by 56 per cent to N16.899m in the review year from N38.63m in the previous year.
This was due to the shortfall in investment income in the year and impact of the interest rates fluctuations in the year, Berger Paints explained.
Its profit for the year declined by 67 per cent to N146.03 in 2020 from N448.73m in 2019, largely on the account of the decline in EBIT and finance income, the multinational paint company added
Earnings per share declined by 68 per cent to N0.50 from N1.55, as the company proposed a dividend of 40 kobo per share to its shareholders.
Free cash flow, however, remained strong at N529m, representing a 34 per cent increase from 2019.
Its revenue for the year increased by 7.1 per cent from N3.58bn in 2019 to N3.84bn in 2020.
The Managing Director, Anjan Sircar, stated on Thursday, “In spite of the emergence of COVID-19 and other environmental and economic unrest at various times in 2020 in the country, which led to the loss of seven weeks of sales, the performance of BPN for the financial year ended 2020 shows modest revenue growth when compared to the 2019 results.
“The revenue growth has been largely driven by the strategic focus on the sales of premium products and inclusion of new business partners. This also contributed to the volume growth. Just like every other company hit by the impact of the pandemic, we experienced disruptions in our supply chain presenting difficulties in the purchases of raw materials and resulting in sharp increases of input costs.
“Further, the challenges in sourcing foreign exchange and the congestions at our ports impacted on the company’s ability to obtain raw materials at advantageous prices. However, we have taken steps to reduce similar impact on our business in the future, including undertaking a robust review of our business continuity processes.
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