RAK Ceramics Announces Q2 2021 Financial Results
- Total revenue in Q2 2021 increased by 70.4% year on year to AED 700.8 million
- Q2 2021 reported net profit stands at AED 94.9 million, compared to a loss of AED 19.8 million in Q2 2020
- Total gross profit margin reached an all-time high in Q2 2021 increasing by 9.6% year on year to 38.1%.
- Q2 2021 total EBITDA is AED 129.9 million, compared to AED 40.5 million in Q2 2020
- Net debt decreased by AED 125 million in Q2 2021 to AED 1.02 billion, and net debt to EBITDA ratio decreased to 2.04x
- The board proposed the distribution of a semi-annual dividend amounting to 10 fils per share for H1 2021, subject to regulatory and statutory approvals
Ras Al Khaimah, United Arab Emirates, 4th August 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 30 June 2021.
Q2 2021 performance reflects strong growth trajectory
Operations across all of RAK Ceramics’ core markets continued to improve, leading to a revenue increase of 70.4% in Q2 2021 to AED 700.8 million when compared to Q2 2020.
Total revenue for Q2 2021 surpassed pre-pandemic levels, increasing by 5% when compared to Q2 2019 driven by growth in all core markets.
Q2 2021 reported net profit stands at AED 94.9 million after considering a one-time net gain from the sale of assets in China and after writing-off excess rent from a leased hotel.
Q2 2021 reported net profit is 29.3% higher than pre-pandemic levels of profit in Q2 2019, indicating steady growth of the business.
Operational efficiencies and increased revenue led to higher cash profits, enabling RAK Ceramics to make a significant reduction in net debt during the period.
In addition, the board of RAK Ceramics have proposed a dividend of 10 fils per share for H1 2021. The dividend will be paid subject to regulatory and statutory approvals.
Operational efficiencies yield results leading to an all time high
In Q2 2021 total gross profit margin reached an all-time high, increasing by +960bps year on year to 38.1% and by +310bps quarter on quarter due to improved efficiencies and reduction in costs across all of RAK Ceramics’ production plants. In 2020, gross profit margin was impacted due to COVID-19 lockdowns.
Revenue growth in key markets
Q2 2021 revenue grew by 114.2% in Saudi Arabia, 142.6% in India, 214% in Bangladesh, 75.5% in Europe and 3.9% in the UAE, when compared to the same period in 2020, when lockdowns impacted operations.
In Saudi Arabia, RAK Ceramics has established itself as a premium provider of ceramic products. The Kingdom is now a key market for RAK Ceramics and will continue to play a role in the company’s long-term growth strategy.
In India and Bangladesh, the second wave of COVID-19 induced lockdowns restricted the movement of goods and subsequently impacted revenue growth.
In Europe, the business continued to grow driven by revenue from the UK and Central Europe, supported by ongoing cost control measures.
In the UAE, production reached its highest level in 5 years due to increased demand from Saudi Arabia and other countries. The company continued to implement operational efficiencies in its UAE production plants, which led to all-time high gross profit margin.
Early signs of recovery in the tableware business
Revenue from the tableware business increased by 160.2% year on year, indicating early signs of recovery. In 2020, the tableware business was impacted due to decreased demand from the airline and hospitality sector, which have now begun to recover.
Sale of assets in China
RAK Ceramics shut down their production facility in China in 2015. In Q2 2021, the Company sold their remaining assets in China, generating a gain of AED 50.1 million.
Abdallah Massaad, Group CEO, RAK Ceramics commented: “I am pleased to report strong financial results for the quarter, reflecting continued growth of the business surpassing pre-pandemic levels of revenue and profitability.
We have worked to implement measures across our core markets to improve brand visibility, customer service and production efficiency, which have increased revenue and profit, setting the stage for long-term growth.
While our post-pandemic recovery in India and Bangladesh continues, we are closely watching the situation and monitoring the health and safety of our employees.
Looking ahead for the remainder of 2021, our priority will be to protect our market share, continue to improve overall productivity and efficiency and turnaround the performance of our tableware business.”
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