RAK Ceramics' Q2 2016 revenue falls 5.9% to $206m
RAK Ceramics performed a series of restructuring activities across Asia and Europe.
Ras Al Khaimah-based RAK Ceramics posted revenue of $206m (AED757m) for the second quarter of 2016, decreasing by 5.9% year-on-year, mainly due to a decline in non-core revenues.
Net profit decreased by 24.1% year-on-year to $17.7m (AED65.3m) for the Q2.
Despite a slowdown in construction activity in the GCC and the impact of geopolitical uncertainty in some of the regional export markets, RAK Ceramics continued to successfully deliver on its long term value creation plan in the first half of 2016, read the company statement.
Integrating the European distribution alongside continued expansions in Bangladesh and the UAE were some of the main initiatives in the quarter confirming efforts from the group to continue strengthening its core businesses in strategic markets.
Consolidated gross margin for the period rose to 29.5%, increasing by 220 bps year-on-year, driven by improved non-core margins according to plan.
During the period, RAK Ceramics performed a series of restructuring activities across Asia and Europe. In India, a new CEO was appointed and over the coming months will be building a team to strengthen Indian operations.
Europe achieved a significant milestone with the integration of the British and German teams under the RAK Ceramics Group, following the acquisition of both subsidiaries in February 2016; cost synergies expected in 2017.
Additionally, consolidation of the Italian subsidiary is underway and is expected to be complete in Q3 2016.
Despite a slower growing economy across Europe, overall sales increased by 11.1% Q-o-Q, showing positive impact of control on improving operations.
Tiles sales increased by 11.7% and sanitaryware sales increased by 9.4% Q-o-Q in Q2 2016.
Abdallah Massaad, RAK Ceramics’ Group chief executive officer said: “We are focused as a group to strengthen the company’s global presence by carrying out strategic global initiatives despite the ongoing challenges in our region.
“There are a number of encouraging signs that will support RAK Ceramics’ growth and we have an ambitious plan for the Group’s future development. In Q2, we maintained our approach of focusing on increasing efficiencies by strengthening our core businesses, consolidating our operations in core markets and streamlining costs.
“With 25 years of ceramics expertise, the company is in a very strong position to capitalise on its global network, wide product range and revitalised brand proposition to deliver long term growth. RAK Ceramics is a real global competitor with solid foundations,” he added.