Earnings Report /
Bangladesh

Berger Paints Bangladesh: Q2 CY23: Similar profit level compared to Q2 CY22; 6M profit rose by 15% yoy

  • c21% yoy revenue growth and 323 bps yoy improvement in Opex/sales neutralized by 523 bps yoy decline in gross margin.

  • c21% revenue growth from price hike due to rising raw material costs, higher commodity prices and BDT depreciation.

  • Gross margin fell substantially by 523 bps yoy to c27% in Q2 CY23 due to higher commodity prices and BDT depreciation.

IDLC Securities
7 November 2022
Published byIDLC Securities
  • Similar profit level compared to Q2 CY22; 6M profit rose by 15% yoy: c21% yoy revenue growth and 323 bps yoy improvement in Opex/sales were neutralized by 523 bps yoy decline in gross margin.

  • c21% revenue growth is likely to be driven by price hike: Price hikes were the likely outcome of increased raw material costs drive followed by BDT depreciation and consequence increment in commodity prices.

  • Gross margin fell substantially by 523 bps yoy to c27% in Q2 CY23: Pre Covid-19, gross margin was in the 40-45% range. In Q2 CY23, it fell 523 bps yoy to 27.3% largely due to significant augment in the cost of sales. High level of global commodity prices and BDT depreciation against USD were mainly culpable for rising cost of sales.

  • Opex/sales declined remarkably by 323 bps yoy: In Q2 CY23, operating expenses remained unmoved from its Q2 CY22’s figure, suggesting that the company successfully compensated the rising cost of sales with truncated operating expenses through the use of cost-effective tools.