RAK Ceramics third quarter net falls by half

RAK Ceramics has boosted exports to retain sales.

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RAK Ceramics said third quarter net profits fell by more than half and nine months profits fell by a third against the previous year, as higher costs comprised the rise in revenues.

The world’s biggest ceramic product company, based in Ras Al Khaimah, said it made AED 40.5m for the last quarter, down from AED 87.6m last year, despite a rise in revenue to AED 892.5m. Cost of sales and finance costs rose during the period. Earnings per share – a key indicator of increased company value – halved to AED 0.05.

Over nine months the company has seen net profit sink 33.5% to AED 181m from AED 273.5m, despite gaining almost double in other income aside from sales against the same period last year. Revenue rose slightly to AED 2.58bn though finance costs leapt to AED 115m.

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RAK Ceramics produces ceramic tiles, bathroom fixtures and sanitary ware globally, with annual turnover of around $1bn. It is one of the dominant supplier in the region and has increasingly turned to regional exports to boost earnings following the fall in construction activity in the UAE.

“The company follows a cautious optimism policy under challenging economic circumstances and expects, with continuing support of governments, the recovery to continue in the coming year,” the company said in a joint statement by chairman HH Mohammed bin Saud bin Saqr al Qasimi and other executives.

Analysts say the price of raw materials has risen in the last year which has affected bottom line revenue for ceramic companies. However, the wholesale price of ceramic tiles from Ras Al Khaimah has been stable between January and June this year, according to Statistics Centre-Abu Dhabi.