RAK Ceramics on hunt for acquisitions as third-quarter profit surges 61%

The company is bullish about sales growth in the UAE and Saudi Arabia as real estate market picks up

RAK Ceramic's third-quarter revenue rose 32 per cent to Dh906 million. Photo: RAK Ceramics
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RAK Ceramics, one of the world's biggest producers of ceramics, is looking to make new acquisitions and is bullish about growth in the UAE and Saudi Arabia after it reported a 61 per cent jump in its third-quarter profit on higher revenue.

“It is a good moment for us as we are doing well and we are looking to expand organically and inorganically,” Abdallah Massaad, group chief executive of RAK Ceramics told The National.

"We are bullish on sales growth in the UAE and in Saudi Arabia as the real estate market picks up," he said.

In March, the company said it was buying Germany's Kludi Group at a valuation of €39 million ($39.3m), as part of its expansion plans and strategy to strengthen its presence in core markets and focus on key products.

Net profit attributable to the owners of the company for the three months to the end of September climbed to about Dh85m ($23m), the company said in a regulatory filing to the Abu Dhabi Securities Exchange, where its shares are traded. Revenue during the period rose 32 per cent to Dh906m.

The company's third-quarter performance was supported by "strong operational capabilities despite navigating through challenging macroeconomic conditions”, Mr Massaad said.

“This quarter, we strengthened our foundation, especially in terms of brand positioning, productivity, efficiency and sustainability, to further solidify our growth and build shareholder value," he said.

"We progressed notably on various expansionary fronts, and we remain in line with our expansionary priorities set for this year.”

Founded in 1989, RAK Ceramics serves clients in more than 150 countries through its network of operational hubs in Europe, the Middle East and North Africa, Asia, North and South America, and Australia.

The company has the capacity to produce 118 million square metres of tiles, five million pieces of sanitaryware, 24 million pieces of porcelain tableware and 2.5 million pieces of faucets per year at its manufacturing plants in the UAE, India, Bangladesh and Europe.

"As we set to wrap up this year, we remain cautiously optimistic about the future and we are confident that we are in a good position," Mr Massaad said.

The Ras Al Khaimah-based company's nine-month profit climbed about 16 per cent to Dh232.8m compared to Dh201.2m during the same period last year. Revenue during the period rose 24 per cent year-on-year to Dh2.61 billion.

RAK Ceramics continues to focus on expanding its operations in the UAE, its biggest market as well as in Saudi Arabia and Bangladesh, Mr Massaad said.

“We have an expansion going on in the UAE and in Bangladesh, we bought land for further increasing our capacity,” he told The National.

The company has signed an investment agreement with the Saudi government for land allocation to grow its operations in the Arab world's largest economy.

Revenue from the UAE market in the third quarter increased 28 per cent year-on-year, driven by the growing real estate market.

Online sales also picked up, helping the company boost its revenue during the period.

Revenue from Saudi Arabia, meanwhile, rose 15 per cent as the company continues to expand its retail footprint in the Arab world’s largest economy.

In the Middle East, excluding the UAE and Saudi Arabia, revenue was up 19 per cent in the July to September period.

Revenue in India declined 14 per cent amid challenging macroeconomic conditions, while it grew 4.4 per cent year-on-year in Bangladesh during the period.

Updated: November 09, 2022, 9:48 AM
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