RAK Ceramics Q1 net profit rises to Dh69.7m on higher revenue, gross profit margins

RAK Ceramics on Thursday reported a total revenue of Dh783.1 million for the first quarter of 2022, reflecting an increase of 8.3 per cent.

In a statement, the Abu Dhabi-listed company said its total earnings before interest, taxes, depreciation, and amortization (EBITDA) rose to Dh129.7 million, showing an increase of 2.9 per cent over the corresponding period of 2021.

The company reported net profit increased to Dh69.7 million in first quarter of 2022 due to higher revenue and gross profit margins. Total gross profit margin for Q1 2022 increased to 37 per cent, showing an increase of 200 basis points year-on-year basis driven by improved efficiencies.

“RAK Ceramics achieved a strong set of results in Q1 2022 despite the ongoing economic challenges weighing in namely on input prices, energy costs and supply chain,” said Abdallah Massaad, Group CEO, RAK Ceramics.

The company said its tiles revenue remained stable with slight decrease of 0.8 per cent year on year to reach Dh516.1 million in Q1 2022, supported by growth in all markets except UAE and Saudi Arabian markets.

Sanitaryware revenue grew by 13.1 per cent in Q1 2022 at Dh155 million driven by growth in all markets except Saudi Arabian market.

Moreover, tableware revenue decreased by 15.8 per cent quarter on quarter to Dh75.7 million while still outperforming year on year levels by 84.3 per cent as the markets situations across all our core markets is gradually improving.

“Our financial performance was supported by key initiatives realised in Q1 2022 aimed to drive further growth in the top-line by enhancing our brand positioning, strengthen our profitability by increasing production efficiencies and improve our liquidity position by tightening our collection policy,” Massaad said.

“Additionally, we were successful in adjusting our prices selectively to partly offset additional costs while still maintaining our market share across markets. We remain focused on positioning ourselves as a trusted lifestyle solution provider and work towards growing and optimizing our portfolio. This included, most recently, our 100 per cent acquisition of Kludi Group, a significant step towards our shared vision of delivering world class service and quality products for our customers whilst also creating strong shareholder value,” he said.

“We continue working towards protecting our market share in our core markets by focusing on brand positioning, product differentiation, sustainable investments and digital transformation,” he added.

Operational review

In the UAE, revenue remained stable year on year with slight increase of 0.7 per cent during Q1 2022, supported by increased brand exposure through the launch of RAK Ceramics e-commerce platform, brand participation in international events and sponsoring high-profile architectural and interior design awards.

RAK Ceramics’ position in Saudi Arabia continues to grow quarter-on-quarter, despite the imposition of a 12 per cent customs duty, driven by the company’s focus on strengthening its presence and brand positioning through increased retail footprint and secured projects. This resulted in increase of 19.8 per cent quarter on quarter in tiles & sanitaryware revenue in Q1 2022.

In Europe, RAK Ceramics witnessed a strong performance. Revenues increased by 8.8 per cent year on year in Q1 2022 mainly driven by the increase in selling price to partially offset the increased logistics and input costs. Company continues to position the brand as a trusted ceramic solution provider, increasing customer base by adding further showrooms, expanding distribution network and tapping into E-commerce platform.

In the Middle East (excluding UAE and KSA), registered a record growth of 56.8 per cent year on year due to increased brand exposure and expanding distribution network.

In India, revenue remained stable with increase of 3.4 per cent year on year supported by expanding dealer’s network presence in additional 12 districts.

In Bangladesh revenue increased by 13.9 per cent year on year supported by price adjustments following increase in input costs and import freight and better brand visibility.

— muzaffarrizvi@khaleejtimes.com