Total revenue was AED2.78 billion, -2.8% YoY, slightly decreasing due to a lower non-core revenue contribution
Total gross profit margin reached an all-time high of 33.2%, an increase of +160bps YoY
Reported net profit was AED225.1 million, -28.7% YoY, a decline due to an increase in energy costs and a decrease in a one-off extraordinary net gain
Tableware revenue was AED264m, +11.0% YoY, supported by growth in US, European and Asian markets
Announces plans for manufacturing expansion in Saudi Arabia
Ras Al Khaimah, United Arab Emirates,
Stable performance in line with expectations
RAK Ceramics PJSC (Ticker: RAKCEC: Abu Dhabi), one of the largest ceramics’ brands in the world, announced its financial results for the year ended 31 December 2018.
The company reported total revenues of AED2.78 billion, a slight decline of -2.8% due to lower non-core revenue contribution, in line with the company’s strategy to divest non-core entities.
Reported net profit was AED225.1 million, -28.7% year on year, however net profit in 2017 included a net extraordinary gain of AED38.6 million from the sale of non-core entities RAK Warehouse and Electro RAK.
RAK Ceramics reported ‘all time high’ total gross profit margins of 33.2%, +160bps YoY, as a result of operational efficiencies, the consolidation of Saudi Arabian entities and higher gross profits in the UAE and tableware businesses. ‘All time high’ total gross profit margins were achieved despite significant increases in energy costs relative to its peers.
The tableware business continued to show strong growth with revenues reaching AED264m, +11.0% YoY, supported by growth in US, European and Asian markets.
Saudi Arabia expansion
RAK Ceramics announces their intention to invest in a state-of-the-art production facility that utilises the latest technology in ceramics manufacturing and, in the first phase, will initially add approximately 10 million square metres per annum to RAK Ceramics’ tile total production capacity.
The company is optimistic for growth in Saudi Arabia due to increasing construction and real estate activity and the attractive cost advantages for manufacturing due to competitive energy costs.
India turnaround on track
In October 2018, RAK Ceramics began commercial production in its recently expanded Indian facility. The Greenfield project for producing slabs began trials production in January 2019 with commercial production expected to commence in Q1 2019.
Abdallah Massaad, Group CEO, RAK Ceramics commented: “2018 was an important year for RAK Ceramics; our record gross profit margins and reported net profit of AED225.1 million is a significant achievement in light of challenging market conditions and continued increases in energy, raw material and freight costs.
Looking ahead for 2019, there are a number of external macro factors which will continue to affect our business. However, we are focused on enhancing our brand and optimising operations across the group, while continuing to protect our strong market share in the United Arab Emirates, India, Bangladesh and Saudi Arabia.
We are pleased to announce our intention to invest in a state-of-the-art production facility in Saudi Arabia, which has historically been one of our most important markets in the region.
We are also focused on improving the profitability of our Indian and European operations and the growth of our tableware business in the US, European and Asian markets.”
-Ends-
About RAK Ceramics
RAK Ceramics is one of the largest ceramics’ brands in the world. Specialising in ceramic and gres porcelain wall and floor tiles, tableware, sanitaryware and faucets, the company has the capacity to produce 116 million square metres of tiles, 5 million pieces of sanitaryware, 24 million pieces of porcelain tableware and 1 million pieces of faucets per year at its 22 state-of-the-art plants across the United Arab Emirates, India, Bangladesh and China.
Founded in 1989 and headquartered in the United Arab Emirates, RAK Ceramics serves clients in more than 150 countries through its network of operational hubs in Europe, Middle East and North Africa, Asia, North and South America and Australia.
RAK Ceramics is a publically listed company on the Abu Dhabi Securities Exchange in the United Arab Emirates and as a group has an annual turnover of approximately US$1 billion.
Contact Details
RAK Ceramics
Steven Allen
Tel: +971(0) 7246 7400
steven.allen@rakceramics.com
FTI Consulting
Debjani Mukherjee
Tel: +971(0) 4437 2100
debjani.mukherjee@fticonsulting.com
Further information is available online at www.rakceramics.com
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