BERGER PAINTS NIGERIA PLC Q3 Result – Strong Earnings Momentum Sustained as Profit Soars 373% YoY on Solid Sales and Cost Efficiency

Executive Summary

Berger Paints Nigeria Plc delivered an impressive performance for the nine months ended 30 September 2025, maintaining strong earnings momentum and demonstrating continued operational efficiency despite inflationary pressures and rising input costs. The Company reported a profit before tax (PBT) of ₦1.46 billion, up 373% year-on-year from ₦309.4 million in the same period of 2024, while profit after tax (PAT) surged 379% YoY to ₦968.0 million (vs. ₦202.1 million in 2024). This remarkable performance was underpinned by robust revenue growth, higher gross margins, and prudent cost management.

Revenue grew 23% YoY to ₦9.32 billion, reflecting stronger demand for decorative and industrial paints. The firm’s sustained marketing efforts, improved production efficiency, and strategic pricing initiatives contributed significantly to this topline expansion. Gross profit advanced 73% YoY to ₦4.12 billion, translating to a gross margin of 44.2% (vs. 31.5% in 2024). Operating profit also climbed sharply by 345% YoY to ₦1.44 billion, reflecting higher sales efficiency, improved scale, and disciplined expense control. The balance sheet remained robust, with total assets rising to ₦8.01 billion, while shareholders’ equity increased by 18% to ₦4.51 billion, reinforcing the company’s financial stability and capacity for sustained growth.

Financial Highlights

₦’000 9M 2025 9M 2024 % Δ YoY

Revenue 9,315,720 7,559,868 +23%

Gross Profit 4,121,542 2,382,780 +73%

Operating Profit 1,441,047 323,863 +345%

Profit Before Tax 1,464,451 309,389 +373%

Profit After Tax 968,010 202,114 +379%

Share Capital 144,912 144,912 -

Total Equity 4,506,513 3,828,336 +18%

Basic EPS (kobo) 334 70 +377%

Net Asset per Share (₦) 16 13 +23%

Market Price per Share (₦) 39 21 +85%

Market Capitalization (₦’000) 11,303,136 6,115,286 +85%

Revenue and Operational Performance

Berger Paints recorded strong revenue growth of 23% YoY, reaching ₦9.32 billion for the nine-month period (vs. ₦7.56 billion in 2024), supported by sustained market demand across its decorative, industrial, marine, and automotive paint segments. The Company’s Q3 2025 revenue rose 20.5% YoY to ₦3.15 billion, driven by increased paint volumes, strategic pricing adjustments, and robust brand visibility. Paint and allied products contributed over 97% of total revenue, while contract services provided additional diversification. Despite inflationary pressure and higher input costs, management successfully maintained cost efficiency through enhanced supply chain coordination, product mix optimization, and targeted rebate policies that improved net sales realization.

Margins Expand Amid Cost Pressures

Gross profit surged 73% YoY to ₦4.12 billion in 9M 2025, reflecting effective cost containment and stronger pricing power. The company’s gross profit margin improved by nearly 13 percentage points, underscoring operational resilience despite higher raw material costs. Administrative and selling expenses increased due to higher logistics and distribution costs; however, the Company’s cost-to-income ratio improved substantially as topline growth outpaced expense growth.

Operating profit rose by 345% YoY to ₦1.44 billion, driven by better cost absorption, enhanced efficiency, and improved economies of scale. Similarly, finance income surged to ₦21.6 million in Q3 2025 (from ₦2.4 million in Q3 2024), reflecting higher returns on short-term financial investments. After accounting for finance costs and taxes, profit after tax rose sharply to ₦968.0 million, translating to a PAT margin of 10.4%, up from 2.7% in the same period last year. Earnings per share increased to 334 kobo, from 70 kobo in 2024, signaling strong shareholder value creation and improved profitability leverage.

Cash Flow and Balance Sheet Analysis

Berger Paints maintained a healthy balance sheet through prudent working capital management and efficient resource utilization.

Key highlights include:

• Total Assets: ₦8.01 billion (↑6.4% from FY 2024: ₦7.52 billion)
• Total Equity: ₦4.51 billion (↑18% YoY), reflecting retained earnings growth.
• Cash and Cash Equivalents: ₦254.6 million (vs. ₦237.2 million at FY 2024), underscoring improved liquidity.
• Inventories: Declined by 24.5% YTD to ₦2.49 billion, indicating better inventory turnover and efficient stock management.
• Trade Receivables: Increased to ₦526.3 million, consistent with expanded sales volumes.
• Total Liabilities: Fell 5.2% to ₦3.50 billion from ₦3.69 billion in FY 2024, driven by reduced borrowings and lower dividend payables.

The company’s debt-to-equity ratio improved to 0.78x (from 0.96x in FY 2024), demonstrating conservative leverage and strong financial flexibility.

Profitability and Efficiency Ratios

Ratio 9M 2025 9M 2024 Change

Gross Margin 44.2% 31.5% +12.7pp

Operating Margin 15.5% 4.3% +11.2pp

Net Margin 10.4% 2.7% +7.7pp

Return on Equity (ROE) 21.5% 5.3% +16.2pp

Current Ratio 1.7x 1.6x +0.1x

Debt-to-Equity 0.78x 0.96x -0.18x

Interpretation:

• Profitability improved markedly across all metrics, driven by better pricing and cost control.
• Operating margin quadrupled due to higher efficiency and scale benefits.
• Liquidity position remains comfortable with sufficient cash buffers to meet short-term obligations.
• Leverage declined, reflecting management’s prudent capital structure management.

Strategic and Operational Insights

1. Sales Expansion: The company benefited from strong decorative paint sales, particularly in the retail segment, supported by enhanced distribution networks and brand visibility.
2. Operational Efficiency: Enhanced automation, supply chain optimization, and energy efficiency initiatives contributed to cost savings and better margin performance.
3. Financial Strength: A robust balance sheet with improved equity and reduced liabilities underscores Berger Paints’ financial discipline.
4. Market Positioning: The company maintained a strong market presence, leveraging its innovative product range and strategic partnerships to capture growing demand in the construction and housing sectors.
5. Dividend Outlook: The strong cash generation and improved profitability position the company favorably for potential dividend payouts in FY2025.

Strengths

• Strong topline growth supported by resilient demand.
• Improved gross and operating margins despite inflationary headwinds.
• Robust balance sheet and enhanced liquidity position.
• Effective cost and inventory management enhancing cash conversion cycle.

Weaknesses

• Rising input costs remain a potential risk to gross margin.
• Growing receivables could increase working capital pressure.
• Continued exposure to foreign exchange volatility due to imported raw materials.

Outlook

Berger Paints is well-positioned for sustained growth heading into Q4 2025, supported by resilient demand in the construction and real estate sectors, rising renovation activity, and continued brand strength. Management’s focus on innovation, operational efficiency, and distribution expansion should help consolidate market share and support profit stability. Although input cost pressures persist, the Company’s pricing strategy and cost efficiency initiatives are expected to mitigate margin risks. Overall, Berger Paints’ strong balance sheet, solid earnings trajectory, and robust cash position provide a firm foundation for continued value creation in FY2025 and beyond.

Analyst Commentary

“Berger Paints Nigeria Plc’s Q3 2025 results underscore its operational resilience and strategic agility in a challenging macroeconomic environment. The Company’s ability to expand margins, strengthen liquidity, and significantly boost profitability highlights effective execution and disciplined management. Sustaining this momentum through continued innovation and market expansion will be key to maintaining long-term growth.”

Conclusion

Berger Paints Nigeria Plc delivered an outstanding performance in 9M 2025, achieving record profitability and demonstrating effective cost control and market execution. With a strengthened financial base, robust liquidity, and strategic growth initiatives, the Company remains well-positioned to sustain earnings momentum and deliver superior shareholder returns in the coming quarters.