Aug 2006 Financial News

Berger Releases Half Year Results

Aug 21, 2006

For the six months ended June 30, 2006 Berger Paints Trinidad Limited (BER) reported a Net Loss of $2.32 million. This translates into a Loss per Share of $0.45 and an increase of 54.30% in trading losses, on the comparable half year period in 2005.

While Net Sales improved by 14.72% to $17.64 million, this was not able to filter down to the bottom line as Operating Margins for the period were severely depressed by higher Raw Material costs and Operating Expenses. Thus, the Operating Loss for the period amounted to $1.61 million and was 83.63% higher than the Half Year Loss in 2005. Depreciation Expense amounted to $0.66 million and was 13.50% higher in comparison to the prior half year period.

The Effective Tax Rate for the period amounted to 2.64%, while the Rate for the same period in 2005 stood at 3.54%.

The Chairman has stated that operational adjustments are now being effected to restore margins and ensure a return to profitability in the second half of the year. He has also stated his expectations of intense trading activity in the second half of the year.

The shares of Berger are currently trading at $3.40. At our forecasted EPS of $0.07 and the current price, this share is trading at a very high multiple of 48.57 times. The average P/E multiple for this sector falls in the range of 12 to 17 times. As such, we maintain our recommendation of SELL.

Gia Singh
WISE Research Team