RAK Ceramics, the world's largest ceramics maker, has blamed declining profits on lower consumer confidence.
The decline is largely a result of lower consumption specifically from European and UAE markets, but Manish Joshi, the chief financial officer of RAK Ceramics, said the company expected business to pick up due to economic growth in the Middle East and emerging markets in Asia and Africa.
The company reported a profit of Dh69.8 million (US$19m) in the third quarter, down from Dh71.6m in the same quarter last year, a statement to the Abu Dhabi Securities Exchange showed.
Mr Joshi said: "We are maintaining revenues and profits despite adverse market conditions because of our diversified market portfolio and having less dependence on the local market. At the moment, less than 16 per cent of our core revenues are derived from the UAE market and over 84 per cent of the core business is from other countries including emerging markets."
RAK Ceramics owns and operates tile and sanitary ware factories in the UAE, Bangladesh, China, India, Iran and Sudan, and has distribution arrangements for its products in more than 125 countries.
Its Indian subsidiary is expected to have its initial public offering by the end of this year, according to Khater Massaad, the company's chief executive.
Analysts agree the decline in RAK Ceramics's third-quarter results are mainly an indication of the economic climate in general and not a long-term trend.
Yasmin Ghanem, an analyst at CI Capital in Cairo, said: "While the ceramics company exports to Europe, the loss of consumer confidence should reverse in the next year and add to RAK Ceramics's profitability
"We are going to see RAK Ceramics grow quite strongly over the next coming years, expanding into other markets outside the Middle East.
"The company is well positioned to have strong growth in the next four to five years because its pricing and cost margins are better than some of the larger European tile producers."