May 2009 Financial News

Berger's restructuring cuts operating cost by 28%

May 20, 2009

Berger Paints managed to cut 28 per cent of its operating expenses when compared to the March quarter of 2008, primarily as a result of restructuring of the company which saw employees and managers take less pay.

In its financial statements for the three months ending March 31, 2009, Berger reported that tit made net loss of $8 million (2008:$3 million net profit) from revenues of $303 million (2008:$336 million).

Managing director Warren McDonald said in the report that the company was "severely impacted by the general adverse economic climate and more specifically, the sharp deterioration in the value of the Jamaican dollar relative to its US counterpart and the downturn in the construction sector".

He did say, however, that the rationalisation exercise implemented in February this year, which saw managers take a 20 per cent salary cut and staff move to a four-day work week, resulted in significant cost savings.

The company did not report its operating expenses.
"These measures are working well so far and are expected to save some $50 million," said McDonald in the company statement. "The company is in the process of establishing productivity norms and associated incentives to further improve productivity and internal efficiencies."

Source: Jamaica Observer-http://www.jamaicaobserver.com/magazines/Business/html/20090519T230000-0500_151835_OBS_BERGER_S_RESTRUCTURING_CUTS_OPERATING_COST_BY_____.asp

Date: 20-05-09