Berger Paints’ 9-month revenue tops Tk2,000cr for first time

Highlights

• Revenue grows 8% to Tk2,052cr
• Profit rises 8% to Tk247cr
• Earnings per share stands at Tk53.26
• Shares close at Tk1,806.40

Berger Paints Bangladesh Limited's revenue surpassed Tk2,000 crore during the first nine months of the company's accounting year, which begins in April, for the first time.

In a stock exchange filing yesterday, the multinational company reported that during the April-December period, its consolidated revenue stood at Tk2,052 crore, reflecting an 8% year-on-year increase. 

The consolidated profit also rose by 8% to Tk247 crore, with earnings per share reaching Tk53.26.

Despite the company's positive business outlook, investors appeared unmoved, as its shares dropped by 0.52%, closing at Tk1,806 today at the Dhaka Stock Exchange.

Meanwhile, the multinational coatings manufacturer is in the process of issuing a rights offer to raise Tk303 crore for constructing its third factory in the National Special Economic Zone. 

According to the company, Berger plans to issue 27.28 lakh shares at Tk1,110 each, including a premium of Tk1,100. This proposal has already been approved by its shareholders during the annual general meeting held on 25 January.

There are also regulatory requirements to increase the free-float shares in the capital market, which prompted the company's sponsors and directors to opt out of the rights offer. 

In a disclosure, the company stated that to meet the 10% free-float share requirement, Berger's parent company, J&N Investments (Asia) Limited – which holds a 95% stake – will not participate in the rights offer.

A senior company officer told The Business Standard that under rights issue rules, J&N Investments is eligible to receive 23.18 lakh shares. However, these shares will instead be allocated to general shareholders, who will receive one rights share for every share held.

The remaining rights shares will be allocated to Berger's employees.

Earlier, in December 2023, the Bangladesh Securities and Exchange Commission (BSEC) exempted Berger Paints from issuing rights shares to its sponsors, directors, and investors holding 5% or more of the company's shares.

In October 2022, the company announced through the stock exchanges its plan to invest approximately Tk480 crore to establish a third factory, with the project expected to be completed by April 2025. 

However, it has now revised the project cost upward to Tk813 crore and has not declared a production commencement date.

A senior officer stated that the company plans to set up an "environment-friendly" factory in the economic zone. Construction work will begin once the required funds are secured.

At the third plant, Berger Paints intends to produce decorative paint, industrial paint, marine coatings, wood coatings, construction chemicals, adhesives, and automotive paints – all of which are in increasing demand in the market.