RAK Ceramics swings to 2021 profit on higher revenue

The company reports $67.16m in net income as impairment charges decline

RAK Ceramics returned to profit in 2021 on the back of higher revenue. Photo: RAK Ceramics

RAK Ceramics, one of the world's biggest producers of ceramic products, swung to profit in 2021, on the back of higher revenue and lower impairment losses as global economies continued to recover from the coronavirus pandemic.

Net profit attributable to the owners of the company for the full year climbed to Dh246.45 million ($67.16m), compared to a loss of Dh129.7m reported a year earlier, the company said in a statement on Monday to Abu Dhabi Securities Exchange.

Revenue at the end of last year surged 21.8 per cent annually to Dh2.86 billion, while impairment losses declined 36 per cent year on year to Dh32.8m.

“Despite the challenges, our business saw positive momentum and a gradual return towards normality with economic activities and trade resumption,” said Abdallah Massaad, group chief executive of RAK Ceramics.

“We reported a significant revenue increase in the first quarter of the year, marking a five-year high in terms of profitability."

The company has reported three consecutive quarters of positive revenue growth, which has resulted in "a healthy net profit", he added.

Founded in 1989, 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. It specialises in the manufacture of ceramic wall and floor tiles, tableware, sanitaryware and faucets.

The company plans to boost spending this year to add more production capacity at different manufacturing units as demand continues to improve, Mr Massaad told The National in an interview.

“In the last two years, we did not spend in Capex (capital expenditure) because of the virus, supply chain disruptions," he said. "This year we will spend more because we are going to grow.”

The company also plans to set up a new manufacturing unit in Saudi Arabia this year to cater to the rise in demand for its products in the Arab world's largest economy. RAK Ceramics' revenue in the kingdom jumped 26.7 per cent last year.

The company will also invest in new showrooms, retail outlet stores and e-commerce platforms in 2022 to boost sales, Mr Massaad said.

The RAK Ceramics board has recommended a dividend of 20 fils per share for the 2021 financial year, half of which was paid in October last year as an interim dividend, the company said.

It also revised the dividend policy with a minimum payout of 20 fils annually for 2022 to be paid on a semi-annual basis and said it will pay a minimum dividend of 60 fils over the next three years.