RAK Ceramics reports 60% jump in Q3 profit thanks to higher revenue

Company's net profit of $14.3m surpassed pre-pandemic levels

RAK Ceramics said revenue and profitability surpassed pre-pandemic levels. Photo: RAK Ceramics

RAK Ceramics, one of the world's biggest producers of ceramics, reported a 60 per cent jump in its third-quarter profit after revenue rose on the back of a strong performance in its core markets.

Net profit attributable to the owners of the company for the three months to the end of September climbed to Dh52.7 million ($14.34m), the company said in a regulatory filing to the Abu Dhabi Securities Exchange, where its shares are traded. Revenue rose 9.4 per cent to Dh684.7m.

“Revenue and profitability surpassed pre-pandemic levels, despite challenging market conditions such as the imposition of customs duty in Saudi Arabia and significant increases in logistics costs due to global container shortages,” the company said on Sunday.

RAK Ceramics exports its products, including sanitaryware and tiles, to more than 150 countries through a network of distributors in Europe, the Mena region, Asia, Australia and North and South America.

The company strengthened its position in Saudi Arabia, despite the imposition of 12 per cent customs duty on its products, it said. It plans to open three new showrooms in the kingdom – two in Riyadh and one in Madinah – later this year.

RAK Ceramics is also looking to set up a manufacturing base in Saudi Arabia to help it expand globally, Abdallah Massaad, group chief executive of RAK Ceramics, told The National. However, he did not give a timeline for the project.

The company, listed in Abu Dhabi, also aims to expand its operations in India as well as in Bangladesh and other markets as global economies continue to recover from the coronavirus pandemic, Mr Massaad said.

RAK Ceramics manufactures from factories in the UAE, India and Bangladesh.

Supply chain disruption is the main challenge being faced by the company in the short to medium-term but it is looking at alternative ways to minimise the impact on the company’s operations through boosting efficiency, Mr Massaad said.

"Our ability to navigate these challenges has helped us to deliver sustained growth, further validating our commitment to delivering shareholder value."

The company said that India operations marked a “strong turnaround”, with business surpassing pre-coronavirus levels thanks to positive business sentiment as Asia’s third-largest economy continues to recover from the coronavirus-induced slowdown.

“We look positive [on growth] as the vaccination programme is working well. If there are no surprises coming from a macro perspective I think we are set to be good,” Mr Massaad said.

RAK Ceramic’s nine-month profit jumped fourfold to Dh201.2m as revenue increased 30 per cent to Dh2.1 billion.