RAK Ceramics, one of the world's largest tile makers, has bucked the global construction slowdown with a 31 per cent increase in third-quarter profits.
RAK Ceramics bakes up a 31% profit gain
RAK Ceramics, one of the world's largest tile makers, has bucked the global construction slowdown with a 31 per cent increase in third-quarter profits. Net income climbed to Dh64.2 million (US$17.4m), from Dh49.1m in the same period last year, as orders secured before the slowdown helped to insulate the firm from the full impact of stalled construction projects worldwide. "The profit is largely generated from forward contracts secured from multiple markets," said Hettish Kumar, the financial analyst who covers the regional construction sector at Global Investment House, an asset manager based in Kuwait. He said profits were in line with analyst expectations.
The firm's total assets at the end of last month stood at Dh4.65 billion, a slight increase from Dh4.5bn at the end of last year. Demand for building materials has fallen sharply across the Gulf this year while hundreds of construction projects worth tens of billions of dollars have either been cancelled or scaled down. In the UAE alone, more than 560 projects have been cancelled or delayed, according to Proleads, a research firm based in Dubai.
"Subsidiaries and affiliates of RAK Ceramics are present in different geographical locations, which serves as a cushion, giving them a chance to make up for losses from different markets," Mr Kumar said. The company's stock rose 4.9 per cent yesterday after the results were announced to the Abu Dhabi Securities Exchange. @Email:firstname.lastname@example.org