RAK Ceramics Announces Q1 2019 Financial Results
- Total gross profit margin increased by 100bps YoY to 32.8% due to an increase in tiles gross profit margin by 90bps to 27.8%.
- Tableware revenue increased by 15% YoY driven by sales in UAE, Europe, US and Asian markets.
- Sanitaryware revenue increased by 6.3% driven by growth in Europe.
- Total revenue decreased by 6.3% to AED620.3 million YoY, due to a 11.6% decrease in tiles revenue.
- Reported net profit decreased to AED36.9 million from AED65.4 million YoY, with a margin of 5.9%. Q1 2018 net profit includes gain on sale of contracting assets of AED18.9 million.
- EBITDA decreased by 9% to AED 97.9 million YoY.
Ras Al Khaimah, United Arab Emirates, 2nd May 2019
RAK Ceramics PJSC (Ticker: RAKCEC: Abu Dhabi), one of the largest ceramics’ brands in the world, announced its financial results for the quarter ended 31 March 2019.
Performance in line with expectations
Net profit decreased by 43.6% YoY because Q1 2018 net profit includes gain on sale of contracting assets of AED18.9 million.
Excluding the gain on sale of assets, net profit decreased by 20.7% year on year primarily due to lower tiles revenue from UAE, Saudi Arabia, India and Bangladesh.
However, the sanitaryware and tableware business performed well, with revenues increasing by 6.3% and 15.1% respectively year on year.
Robust profit margins
Gross profit margins increased by 100bps to 32.8%. Tiles margins increased by 90bps to 27.8% driven by continued improvements in operations, while sanitaryware margins remain stable at 39.9%. Tableware margins decreased by 8.4% year on year to 51.6% due to changes in the product mix.
Despite high energy costs, RAK Ceramics remains profitable and operationally efficient.
Saudi Arabia expansion update
Last quarter RAK Ceramics’ announced their intention to invest in a state-of-the art production facility in Saudi Arabia which in the first phase would add approximately 10 million square metres per annum to the company’s tile production capacity. Discussions on land and gas allocation are underway.
Abdallah Massaad, Group CEO, RAK Ceramics said: “The first quarter of 2019 has been stable from the view of our gross margins. We had a slow start to 2019 which we expect to make up over the coming quarters. Continued investment in operational efficiencies has led to robust gross profit margins, as we remain focused on running a profitable business despite high energy costs.
Looking ahead to the remainder of 2019, we will develop a strategy to further counteract increases in energy costs and improve profitability in Europe and Saudi Arabia. Our business in India is on the right track, we hope to establish it as a hub moving forward.
RAK Ceramics is also always on the lookout for opportunistic acquisitions, as we optimise production and protect our growth in India, Bangladesh and the UAE.”
About RAK Ceramics
RAK Ceramics is one of the largest ceramics’ brands in the world. Specialising in ceramic and gres porcelain wall and floor tiles, tableware, sanitaryware and faucets, the company has the capacity to produce 123 million square metres of tiles, 5 million pieces of sanitaryware, 24 million pieces of porcelain tableware and 1 million pieces of faucets per year at its 22 state-of-the-art plants across the United Arab Emirates, India, Bangladesh and China.
Founded in 1989 and headquartered in the United Arab Emirates, RAK Ceramics serves clients in more than 150 countries through its network of operational hubs in Europe, Middle East and North Africa, Asia, North and South America and Australia.
RAK Ceramics is a publically listed company on the Abu Dhabi Securities Exchange in the United Arab Emirates and as a group has an annual turnover of approximately US$1 billion.
RAK Ceramics FTI Consulting
Steven Allen Debjani Mukherjee
Tel: +971(0) 7246 7400 Tel: +971(0) 4437 2100
Further information is available online at www.rakceramics.com