RAK Ceramics Announces Q3 2020 Financial Results
- Performance improves across global operations
- Total revenue remained stable year on year at AED 625.7 million
- Tiles revenue increased by 7.1% year on year to AED 439 million driven by growth in Saudi Arabia and Europe
- Reported net profit decreased from AED 45.6 million to AED 34 million due to, lower gross profit margins and higher provisions for trade receivables
- Total EBITDA decreased from AED 108.7 million to AED 104.4 million
- Total gross profit margin decreased by -220bps year on year to 31.1% while tiles gross profit margin increased by 130bps year on year to 31.2%.
Ras Al Khaimah, United Arab Emirates, 04 November 2020
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 September 2020.
Performance improves across global operations
RAK Ceramics’ Q3 performance has gained momentum as markets are showing signs of recovery from the impact of Covid-19. The speed and trajectory of demand remains uncertain, however, quarter on quarter revenue has increased by 52.1%.
Based on growing market demand, production in the UAE has scaled up to meet demand from Saudi Arabia. Production in India and Bangladesh have also resumed in phases.
The tableware business continues to suffer due to the impact of COVID-19 on the hospitality and airline sectors.
Covid-19 recovery leads to stable revenue
Total revenue remained stable and increased by 0.2% year on year to AED 625.7 million for the quarter, driven by growth in Saudi Arabia and Europe.
Excluding the tableware business, total revenue increased by 4.8% year on year.
Growth in Saudi Arabia
RAK Ceramics has positioned itself as a premier product supplier in Saudi Arabia, offering differentiated product lines compared to local manufacturers. Sales improved in the retail channel following the launch of three flagship showrooms. The business continues to roll-out its retail concept through a mix of flagship and dealer owned showrooms across the Kingdom.
The imposition of anti-dumping duty on tiles from China and India has been effective since June 2020 and has supported revenue growth during the quarter.
Revenue from Saudi Arabia increased by 95.8% year on year to AED 137.8 million mainly driven by the tiles business.
Growth in Europe and stability in India
Revenue in Europe increased by 12.9% to AED 91.5 million due to the easing of lockdowns resulting in improved economic activity.
Revenue in India has also rebound to pre-Covid levels to AED 66.7 million.
Abdallah Massaad, Group CEO, RAK Ceramics commented: “We have begun to see a return to pre-Covid-19 levels of operations across our global business. While the sanitaryware and tableware business remains impacted, our tiles business has witnessed healthy growth in Europe and Saudi Arabia, leading to an increase in overall revenue.
RAK Ceramics has shown great resilience given the disruptions that the pandemic has brought to our business. There is no escaping that our business was heavily impacted earlier in the year, but we are confident in our ability to adapt, recover and deliver value to our shareholders in the long term.
Looking ahead, we will continue to implement initiatives to manage the impact of Covid-19. We also plan to diversify and improve profitability in export markets, while focusing on improving operations in India and Europe.”
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 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