RAK Ceramics reports 60% jump in profit due to higher revenue

RAK Ceramics, one of the world's biggest producers of ceramics, reported a 60 per cent jump in its third-quarter profit after revenue rose on the back of a strong performance in its core markets.

Net profit attributable to the owners of the company for the three months to the end of September climbed to Dh52.7 million ($14.34m), the company said in a regulatory filing to the Abu Dhabi Securities Exchange, where its shares are traded. Revenue rose 9.4 per cent a year to Dh684.7m.

“Revenue and profitability surpassed pre-pandemic levels, despite challenging market conditions such as the imposition of customs duty in Saudi Arabia and significant increases in logistics costs due to global container shortages,” the company said on Sunday.

RAK Ceramics exports its products, including sanitary ware and tiles, to more than 150 countries through a network of distributors in Europe, the Mena region, Asia, Australia and North and South America. The company also has production plants in India and Bangladesh.

The company strengthened its position in Saudi Arabia, despite the imposition of 12 per cent customs duty on its products, it said. It plans to open three new showrooms in the kingdom – two in Riyadh and one in Madinah – later this year.

RAK Ceramics also said that India operations marked a “strong turnaround”, with business surpassing pre-coronavirus levels due to positive business sentiment as Asia’s third-largest economy continues to recover from the coronavirus-induced slowdown.

"Our ability to navigate these challenges has helped us to deliver sustained growth, further validating our commitment to delivering shareholder value," said Abdallah Massaad, group chief executive of RAK Ceramics.

"Looking ahead for the remainder of 2021, we will continue to focus on improving operational efficiencies across our markets, protecting our market share and increasing export profitability.”

RAK Ceramic’s nine-month profit jumped fourfold to Dh201.2m as revenue increased 30 per cent to Dh2.1 billion.