Ras Al Khaimah, United Arab Emirates, 10 May 2018
RAK Ceramics PJSC (Ticker: RAKCEC: Abu Dhabi), one of the largest ceramics’ brands in the world, announced its financial results for the first quarter ended 31 March 2018.
The company reported stable year on year performance with total revenues at AED 661.8 million and core revenues growing by 1.0% to 626.8 million.
RAK Ceramics’ total revenue in Q1 2018 decreased by 2.8% year on year, driven by a 42.1% drop in non-core revenue and due to discontinuation of the rough grading business in line with RAK Ceramics’ value creation plan.
Stable core business performance
RAK Ceramics’ core revenue grew by 1% year on year, driven by strong sales in the UAE, India and Bangladesh.
Tile revenues in the UAE, India and Bangladesh increased by 19%, 15.9% and 3.9% respectively year on year. Core EBITDA increased by 3.0% to AED 99.3m compared to Q1 2017 with margins of 15.8% and core gross profit margin remained stable at 32.0% compared to Q1 2017.
Driven by company’s strategic focus on divesting non-core operations, non-core revenue contribution reached an all time low of 5.3% due to the discontinuation of the rough grading business.
Total gross margin increased by +20bps compared to the same period last year. Core margins remained stable at 32% despite an increase in raw material costs and natural gas prices.
However, as part of the value creation plan, continued improvement in operational efficiencies has offset the increase in costs, and contributed to EBITDA. The tableware business performed well also with gross margins increasing due to a change in the product mix.
Abdallah Massaad, Group CEO, RAK Ceramics commented
“Our first quarter performance was stable and in line with expectations despite an increase in our energy costs, which we were able to offset through improvements in our operational efficiencies.
Our key markets, UAE, India, and Bangladesh remain strong and we have even seen increased revenue from the growing Indian market following the set-up of a JV late last year. Looking ahead for the rest of the year, we remain focused on creating further operational efficiencies and progressing with our value creation plan.”