RAK Ceramics, one of the largest ceramics manufacturers in the world, has posted a 43% rise in Q3 profits largely driven by an increased level of activity across RAK Ceramics’ core businesses in core markets and margin improvements in tiles and non-core businesses. Adjusted net profit, excluding the impact of hyperinflation from Sudan and Iran increased by 10.2%, reaching AED 90.7 million in Q3 2014.
Overall net profit for Q3 2015 increased by 43% at AED 82.1 million (Q3 2014: AED 57.4 million), supported by controlled operating costs and procurement savings, which reached AED 15.2 million in Q3 2015, allowing the company therefore, to increase blended gross margins to 30.7% from 26.9% in Q3 2014.
Results exceeded analysts’ estimates and came in line with management expectations despite an ongoing dampening economic environment, a weaker Euro, higher natural gas prices and falling oil prices. This reflects the success of RAK Ceramics’ refocused strategy and the continued execution of the ‘Value Creation Plan’ to invest in and expand core businesses and divest non-core businesses.
Tiles sales witnessed strong growth with a 3.5% increase in the UAE at AED 122.3 million and a significant 32.1% increase in Saudi at AED 114.7 million.
Abdallah Massaad, CEO of RAK Ceramics, said: “RAK Ceramics has delivered a strong performance in Q3 2015, demonstrating the core strength of our business. Over the past year, we focused on core business and growth opportunities in core markets and succeeded in delivering results. We invested, we grew, and we are on track to satisfy all elements of our value creation strategy.
“Additionally, RAK Ceramics made significant efforts this year to expand in new global markets. The company opened a representative office in Singapore during the year to expand its presence in Asian markets, which has already borne fruit, and is looking to expand its presence in the Americas towards the end of 2016 as the company leverages its international capabilities.”
In Numbers
- Overall Net profit increased by 43.0%
- Adjusted net profit increased by 10.2%
- Cost savings from raw material and freight procurement reached AED 15.2 million
- Net debt fell marginally from Q2 2015
- Overall tiles revenues decreased by 1.9%
- Saudi revenues reached AED 122.2 million
- Non-core business revenues reached 106.3mn from 131.1mn in Q3 2014