RAK Ceramics Announces Q1 2021 Financial Results
- RAK Ceramics surpasses pre-pandemic levels of operation, with record levels of revenue and profitability
- Q1 2021 revenue increased by 21.9% year on year to AED 722.8 million, a five-year high
- Q1 2021 gross profit margin increased by +230 bps year on year to 35.0%, an all-time high
- Q1 2021 reported net profit increased by 107.2% year on year to AED 62.7 million
- Total EBITDA increased by 32.5% year on year to AED 126.1 million
- Net debt decreased by AED 87.8 million to AED 1.14 billion
- Net debt to EBITDA ratio decreased to 2.79x
Ras Al Khaimah, United Arab Emirates, 10th May 2021
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 2021.
Q1 2021 performance surpasses pre-pandemic levels, reflecting resilience and strong growth of the business
Operations across global markets continued to improve in Q1 2021, leading to the strongest start to the year recorded by RAK Ceramics since 2016.
Total gross profit margin for Q1 2021 reached an all-time high of 35.0% driven by an increase in revenue, an improvement in efficiencies and the optimisation of production lines.
Total revenue for Q1 2021 is the highest it has been in 5 years, increasing by 21.9% year on year to AED 722.8 million driven by growth in all core markets.
Reported net profit stands at AED 62.7 million, outperforming pre-pandemic levels of profit (AED 36.9 million in Q1 2019). The Company has returned to a state of steady growth.
Revenue growth in key markets
Q1 2021 revenue grew by 78.5% in Saudi Arabia, 2.1% in the UAE, 67.0% in India, 18.9% in Bangladesh, and 22.7% in Europe when compared to the same period in 2020, driven by improved economic activity.
In Saudi Arabia, the Company’s strategy continues to yield results. The imposition of anti-dumping duties on tiles from India and China in the Kingdom initially led to an increase in demand for RAK Ceramics’ products. Capitalising on this demand, the Company invested in differentiated tiles and new showrooms, developing significant brand equity in the market. RAK Ceramics is now the go-to provider of premium ceramic products in the Kingdom.
In the UAE, despite the impact of COVID-19, workforce was not reduced, and production reached the highest level in 5 years due to increased demand from Saudi Arabia.
In India, the Company implemented several initiatives to streamline the business. The sales strategy was improved. Improved economic activity and positive business sentiments in the real estate sector led to increased demand and steady growth in revenue.
In Bangladesh, production is running at optimum capacity. RAK Ceramics introduced new products for the rural and urban segments of the market, improving brand visibility. This has led to an increase in market share.
In Europe, the business surpassed pre-pandemic levels of operation. RAK Ceramics was able to increase its customer base in Central Europe and the UK by differentiating itself from competitors and providing superior product management.
With an eye on future growth, RAK Ceramics continues to invest in branding initiatives including collaborations with premium designers, franchising of retail concepts and the launch of outlet stores in the UAE and Saudi Arabia.
Abdallah Massaad, Group CEO, RAK Ceramics commented: “I am pleased to report strong financial results for the quarter, driven by record levels of revenue and profitability.
While 2020 was a difficult year for the business, however early implementation of measures to manage the impact of the pandemic as led to an accelerated recovery beginning as early as Q3 2020. Today, RAK Ceramics is in a position of strong growth, surpassing pre-pandemic levels of operation, with gross profit margins reaching an all-time high.
Our production levels are at the highest they have been since 2016, on the back off increased demand across our key markets. We will capitalise on this demand by continuing to build our brand equity and positioning RAK Ceramics as a global provider of premium ceramic lifestyle solutions.
Revenue continues to recover across all markets; however, we expect revenue to be impacted by the second wave of COVID-19 crisis in India and Bangladesh. The health and safety of our employees will remain a priority as we manage our business in that market.
Looking ahead for the remainder of 2021, our priority will be to invest in brand equity, grow our business in Saudi Arabia and protect our market share in the UAE and Bangladesh.”
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 118 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 21 state-of-the-art plants across the United Arab Emirates, India and Bangladesh.
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 publicly 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) 50 165 8989
Further information is available online at www.rakceramics.com