UAE’s RAK Ceramics Posts Dhs150m H1 Net Profit

UAE-based Ras Al Khaimah Ceramics, one of the world’s largest manufacturers of floor tiles, posted a net profit of Dhs149.9 million in the first half of this year compared to Dhs150.14 million during the corresponding period in 2013.

Although the year-on-year profits fell slightly by 0.16 per cent, net profit margins increased nine per cent compared to 8.6 per cent from H1 2013, the company said in a statement.

Total revenues generated during the first half of this year declined by 4.4 per cent to reach Dhs1.66 billion compared to the same period last year.

However, the company’s strategy of refocusing on its core ceramic business has been paying dividends, the statement added. The tilemaker’s revenues from its core ceramics products increased by 3.9 per cent to Dhs1.41 billion, up 84.9 per cent from the same period last year.

This re-focusing strategy also resulted in RAK Ceramics’ earnings before interest, taxes, depreciation and amortization (EBITDA) increasing over the period to Dhs310.3 million from Dhs291.1 million in 2013. EBIDTA margins rose by 18.7 per cent in H1 2014 as compared to 16.8 per cent in H1 2013.

“RAK Ceramics continues to invest in new technology and machineries as part of its expansion plans to tap new market segments,” said Abdallah Massaad, CEO, RAK Ceramics.

“The overseas expansions have doubled its production capacity of sanitary ware in India and Bangladesh to cater to growing local demands.”

In April, RAK Ceramics announced plans to invest up to $80 million to expand its plants in Bangladesh and India. The company also said that it will boost production capacity in India to 800,000 pieces of sanitaryware from the current 300,000 to meet rising demand.

Ras Al Khaimah’s ruling family, who are the majority shareholders of the company, sold a 30.6 per cent of their stake in RAK Ceramics to Samena Limestone, a subsidiary of investment firm Samena Capital earlier this year.