RAK Ceramics’ net profit surges 30% on higher revenue

The company is 'actively pursuing' greenfield projects in Bangladesh and Saudi Arabia

RAK Ceramics' revenue for the quarter rose about 13 per cent annually in the first quarter. Photo: RAK ceramics

RAK Ceramics, one of the world’s biggest producers of ceramic products, reported a 30 per cent annual jump in its first-quarter net profit as revenue surged despite a rise in expenses and costs amid global economic challenges.

Net profit attributable to owners of the company for the three months to the end of March rose to Dh73.4 million ($20 million), from Dh56.5 million during the same period last year, the company said in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.

Revenue for the quarter rose by about 13 per cent annually to Dh882.4 million.

Administrative and general expenses increased 15 per cent to Dh57.7 million while selling and distribution expenses climbed 7 per cent year on year to Dh173.4 million.

Finance costs jumped 63 per cent annually to Dh28.5 million.

“RAK Ceramics ... continues to be resilient despite the ongoing economic challenges weighing in, namely due to higher rates of interest, currency devaluation, recessionary fears in major markets and increased competition,” said group chief executive Abdallah Massaad.

Founded in 1989, RAK Ceramics serves clients in more than 150 countries through its network of operational centres in Europe, the Mena region, Asia, North and South America, and Australia.

The company has the capacity to produce 118 million square metres of tiles, five million pieces of sanitary ware, 24 million pieces of porcelain tableware and 2.5 million pieces of faucets a year at its manufacturing plants in the UAE, India, Bangladesh and Europe.

RAK Ceramics continues to make progress on its expansion plans across various markets and has commenced commercial production of a smart tiles factory in the UAE with automation and Internet of Things technology, it said.

Tableware capacity expansion is also under way in the Emirates, with commercial production for an additional 10 million pieces estimated in the third quarter of this year.

The company is also “actively pursuing” greenfield projects in Bangladesh and Saudi Arabia amid expansion plans, it said.

“Our performance in the UAE market remains solid, allowing us to maintain a strong position as we encounter challenges in other major markets in the form of local competition, recessionary fears and currency devaluation,” Mr Massaad said.

“Despite these obstacles … we will continue to actively expand our retail presence in the region.”