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UAE construction boom helps RAK Ceramics lift profit despite regional disruptions
UAE-based ceramics manufacturer reports a 2.9 % rise in Q2 net profit, supported by strong demand in the UAE, Saudi Arabia and Bangladesh despite supply chain challenges and higher logistics costs
- PUBLISHED: Thu 6 Aug 2026, 10:57 AM
Strong demand from the UAE's real estate and construction sectors helped RAK Ceramics deliver higher profitability in the second quarter, offsetting geopolitical tensions, supply chain disruptions and rising logistics costs across key international markets.
The Abu Dhabi-listed ceramics manufacturer reported net profit after tax of Dh68.3 million for the three months ended June 30, up 2.9 per cent from Dh66.4 million a year earlier. Revenue eased 0.5 per cent year-on-year to Dh822.8 million, while gross profit margin improved to 41 per cent from 40.6 per cent. EBITDA stood at Dh157.5 million, compared with Dh160.8 million in the corresponding period last year.
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The UAE was the group's standout market, with revenue rising 22.7 per cent to Dh298.2 million, supported by robust activity in the property and construction sectors. Saudi Arabia posted 11.6 per cent growth to Dh60.8 million, while Bangladesh recorded a 20.7 per cent increase in revenue to Dh59 million.
Speaking about the company's performance amid regional uncertainty, Abdallah Massaad, Group Chief Executive Officer of RAK Ceramics, said the industry had faced significant operational challenges ranging from supply chain bottlenecks to shortages of containers and raw materials.
"You know very well for any industry everywhere, especially in our region, it's not an easy time. We have challenges from supply chain, raw materials, spare parts and export availability of containers," he said. At the same time, he noted that disruptions to imported products created opportunities for regional manufacturers to strengthen their position. "With every challenge, you have also opportunities."
Massaad said RAK Ceramics benefited from its reputation as a dependable supplier at a time when many projects were grappling with uncertainty over imported materials.
"We already had a good market share in the UAE and Saudi Arabia, but we put more effort and were also approached because RAK Ceramics is always considered a reliable supplier," he said. "We were proactively supporting clients, being close to potential clients and finding solutions where we were able to supply. This gave an impact on increasing our market share and supply locally in Saudi Arabia."
The company said it maintained product availability and service levels by leveraging its regional manufacturing footprint, locally sourced raw materials and alternative logistics routes.
While the Middle East and Bangladesh delivered growth, conditions remained more challenging elsewhere. Revenue in Europe fell 35.7 per cent because of supply disruptions and higher freight costs, while revenue in India declined 15.8 per cent following temporary production interruptions caused by gas shortages in Morbi, one of the country's largest ceramics manufacturing hubs.
Looking ahead, Massaad said securing supply chains and increasing local sourcing remained among the company's top priorities.
"For us, one factor is how to secure our raw materials, spare parts and upgrading machinery. Looking at resources and using local content to the maximum is our first priority," he said. He added that innovation and product differentiation would continue to drive growth, including the company's expansion in premium porcelain products and new collaborations.
The company is also pressing ahead with a new manufacturing facility in Saudi Arabia, which Massaad said is expected to be operational by the second quarter of 2027.
"It's a priority to finish and start producing on time," he said, adding that improving operations in India and Bangladesh and stabilising performance in Europe would remain key strategic objectives.
Despite ongoing uncertainty in global markets, Massaad said the company's immediate focus was not aggressive top-line growth but protecting profitability through operational efficiency.
"As you've seen, we did not grow much in terms of revenue, but even though costs increased, we were able through efficiency to maintain and sustain our profitability," he said. "More than growing these days, it's a matter of sustaining and improving efficiency inside."
Massaad also highlighted sustainability and artificial intelligence as long-term priorities. He said RAK Ceramics was recently recognised among a small group of UAE companies receiving platinum-level sustainability recognition and is investing heavily in recycling, circularity and energy-efficient operations. On AI adoption, he said the company had implemented digital technologies across its factories and established dedicated AI leadership and "AI champions" across departments to drive productivity improvements."Our priority was clear: increasing our market share across the region, while making every effort to support customers in other markets," Massaad said. "We remain confident in our ability to deliver sustainable long-term value for our stakeholders."
Associate Editor Somshankar Bandyopadhyay brings more than three decades of experience to the KT newsroom. Currently, he manages the news production of the business section, ensuring that the top economic and business news of the day reaches its readers.