Iran, Sudan units drag down RAK Ceramics' profits
Company plans to continue winding down non-core units to focus on revamping sales and production of bathware products
RAK Ceramics revealed a 3.5% increase in profits for 2014 to $76.7m despite the fact that units in Iran and Sudan booked losses of $15.4m as a result of hyperinflation in each country.
The company said that adjusted net profit (excluding the impact of hyperinflation) came in at %92.1m, or around 14.1% higher than 2013.
However, revenues fell by 6.4% to $893m. The company, which is one of the biggest ceramic tiles and sanitary ware equipment companies in the world, has undergone a change in strategy since private equity firm Samena Capital bought a 30.6% share last year.
It set a new strategy to scale down operations and concentrate on the most profitable parts of the business. The firm has already sold its investment in the Sudan venture, as well as a pharmaceuticals arm in Bangladesh and its stake in grouting and waterproofing business RAK Laticrete. It has scaled back operations in Iran and China and its UAE contracting arm.
For the year ahead, it plans to revamp its sals operations and expand its bathware businesses in the UAE, India and Bangladesh.
CEO Abdallah Massaad, said: "As we continue to invest in our ‘core-business’ activities across core markets, we expect to strengthen our ability to expand our customer base, significantly improve profitability and increase returns for our shareholders."
A new dividend policy has also been established to pay out at least 60% of net profits to shareholders.