RAK Ceramics, one of the world's biggest producers of ceramics, swung to a full year loss as revenue fell and impairments climbed amid the coronavirus pandemic-induced economic slowdown.
The company reported a loss of Dh130 million for the period ending December 31, 2020 compared to a profit of Dh164m in the same period a year earlier, it said in a statement to the Abu Dhabi Securities Exchange, where its shares trade. Revenue fell 9 per cent year-on-year to Dh2.34 billion, while a revaluation of investment properties led to an impairment loss of Dh213m as real estate values declined.
RAK Ceramics exports its products, which include sanitaryware and tiles, to more than 150 countries through a network of distributors in Europe, the Middle East and North Africa, Asia, Australia and North and South America. The company also has production plants in India and Bangladesh.
“2020 was a challenging year across the board. RAK Ceramics was particularly impacted due to our exposure to the hospitality and real estate industries,” the company said on Thursday.
“However, given our ability to act decisively during times of crisis, we were able to implement measures to manage the impact of Covid-19 which allowed us to witness early signs of recovery starting from the third quarter of 2020 and deliver healthy revenue for the year.”
During the period, RAK Ceramics also grew its business in Saudi Arabia, the Arab world’s biggest economy.
In Saudi Arabia, revenue increased 57.9 per cent year-on-year “due to the introduction of differentiated tile sizes and a focus on retail and wholesale sales and also backed by the imposition of anti-dumping duties”, it said.
The GCC Industrial Cooperation Committee started levying anti-dumping duties on ceramic tiles imported from India and China in June last year. Imports from India face duties ranging from 17.6 per cent to 106 per cent, while duties on Chinese imports are between 23.5 per cent and 76 per cent.
In Europe, revenue rose 2.7 per cent year-on-year, driven by growth in the sanitaryware and tiles market, while in the Middle East (excluding the UAE and KSA), sales increased 12 per cent year-on-year.
“Looking ahead, our priority will be to protect our market share in the UAE, Saudi Arabia and Bangladesh, while diversifying and improving profitability in export markets.”
The company reduced its net debt by10.6 per cent to Dh1.23bn.