RAK Ceramics reports revenues of $185.4m in Q1 2017
Tiles and sanitaryware revenues were boosted by the UAE market and increased sales to Saudi Arabia
Ras Al Khaimah-based ceramics firm, RAK Ceramics, has registered a total revenue of $185.4m (AED681m), by 4% in the first quarter of 2017 compared to the previous quarter.
The growth of its core businesses in the three-month period was mainly driven by 13% jump in tile revenues besides a stable growth in sanitaryware revenues of 2.9% and 12.9% increase in tableware revenues.
The tiles and sanitaryware revenues were boosted by the UAE market and increased sales to Saudi Arabia, according to state news agency, WAM.
Tableware sales were 40% higher year-on-year (YoY) on account of the consolidation of Restofair, which took effect from 1 January, 2017. Like-for-like tableware revenues increased 4.3% compared to Q1 2016.
The firm reported strong quarter-on-quarter (QoQ) performance with its total revenues surging to $185.4m (AED681m) and core revenues hitting $169m (AED620.6m).
Revenues in the UAE, the company’s largest market, rose by 10.2% QoQ and 5.4% YoY. This growth was driven by a revenue increase of 17.9% YoY in sanitaryware and 2.2% YoY in tiles.
The sales in Saudi Arabia, its other core market, surged by 85% to $13.87m (SAR52m) compared to $7.51m (AED27.6m) in the previous quarter.
While still below Q1 2016 levels, the quarterly rebound appears to signal the beginning of a market recovery, the report stated.
On the Q1 results, group chief executive officer, Abdallah Massaad, said: "Our first quarter performance came as expected. We successfully identified the UAE as a source of growth and we are pleased to see Saudi Arabia having turned a corner."
"Our second half results should also benefit from a turnaround in sales in India and greater production from Iran.
“We continue to remain focused on cost efficiencies and anticipate better gross margins and lower overheads going forward, which we believe will increase profitability and shareholder value," explained Massaad.
Driven predominantly by strong demand in the UAE and Europe, sanitaryware revenues grew by 9.6% to $33.2m (AED122.2m) compared to $30.3m (AED111.5m) in Q1 2016.
Tile gross margins surged by 160bps YoY to 27%, the highest quarterly result for RAK Ceramics since 2014, driven by improved production efficiencies across UAE tile plants, the statement added.