RAK Ceramics third-quarter profit halves on rising costs
The company also reports a 5% year-on-year drop in revenue during the period
RAK Ceramics, one of the world’s biggest makers of tiles and sanitary ware, reported on Sunday a nearly 50 per cent slide in third-quarter net profit as costs rose and revenue dipped.
Net profit attributable to equity holders fell to Dh38.4 million in the three months to September 30, the company said in a statement to the Abu Dhabi Securities Exchange, where its share are traded.
Revenue dropped 5 per cent to Dh669.5m from a year earlier.
Administrative and general expenses rose 16 per cent to Dh58.6m, while selling and distribution expenses increased 20.4 per cent to Dh110.9m.
“RAK Ceramics’ performance for the third quarter of 2018 has been stable, despite market slowdown in the summer months and increased costs," said chief executive Abdallah Massaad. "Looking ahead to the remainder of 2018, our priorities are to increase market share in the UAE, India and Bangladesh, and improve profitability in Europe, as we remain focused on cost reduction and operational efficiencies.”
RAK Ceramics is looking for acquisition opportunities in the Arabian Gulf as it shifts from restructuring its business towards boosting growth, Mr Massaad told The National in August.
“Looking ahead, there are a number of external factors that might affect our business with increased competition, gas and oil price volatility and geopolitical headwinds,” the company on Sunday.
“However, we see that GDP is growing in all our core markets and the UAE and KSA have higher government infrastructure budgets this year giving positive trends for growth.”
Exclusive: RAK Ceramics eyes GCC acquisitions in a turnaround strategy
The company is also planning to complete its capacity expansion in India by the fourth quarter of this year, with operations in the subcontinent expected to be the biggest driver of growth in 2019 followed by the UAE, Saudi Arabia and Europe.
RAK Ceramics is doubling its capacity in India after setting up its third plant in the country and will reach 18 million square metres of ceramics, adding another 5 to 7 per cent to the group’s total capacity, he said in August.
The company has earmarked Dh300m for capital expenditure in 2018, of which it has allotted Dh85m, leaving it with Dh215m for the remainder of the year, he said.
Updated: November 4, 2018 11:33 AM