RAK Ceramics, one of the world's biggest producers of ceramics, swung to a second-quarter profit as improved performance in its core markets fuelled revenue growth.
Net profit attributable to the owners of the company for the three months to the end of June climbed to Dh87.81 million ($23.9m), from a Dh11.59m loss in the same period a year ago, the company said in a regulatory filing to the Abu Dhabi Securities Exchange, where its shares are traded.
The earnings include a “one-time net gain” from sale of its assets in China.
Quarterly revenue surged more than 70 per cent year-on-year to Dh700.8m as the business grew steadily despite Covid-19 headwinds.
The second-quarter performance reflects a "strong growth trajectory [as] operations across all of RAK Ceramics’ core markets continued to improve”, the company said.
“Total revenue … surpassed pre-pandemic levels, increasing by 5 per cent when compared to [the second quarter of] 2019.”
RAK Ceramics shut down its production unit in China in 2015 and the sale of its remaining assets in the country generated a “gain of Dh50.1m” in the second quarter, pushing its reported profit for the period 29.3 per cent higher than during pre-pandemic levels in 2019, the company said.
Total earnings before interest, taxes, depreciation and amortisation climbed to Dh129.9m for the three months to the end of June, from Dh40.5m in the same period last year.
Total gross profit margin hit a record high, increasing by 9.6 per cent a year to 38.1 per cent, the company said.
Net profit for the first six months of the year rose to Dh148.49m, from Dh14.1m in the same period in 2020. Revenue also grew to Dh1.42 billion, from Dh1bn at the end of the June last year.
RAK Ceramics manufactures ceramic tiles, kitchen and sanitary ware from factories in the UAE, India and Bangladesh.
The company reported a 114.2 per cent increase in sales in Saudi Arabia, one of its biggest markets, which last year introduced anti-dumping duties on ceramic tile imports from India and China.
RAK Ceramics’ production in the UAE during the second quarter hit its highest level in five years on the back of higher demand from Saudi Arabia.
“In Saudi Arabia, RAK Ceramics has established itself as a premium provider of ceramic products,” the company said. “The kingdom is now a key market for RAK Ceramics and will continue to play a role in the company’s long-term growth strategy.”
Second-quarter 2021 sales rose by 142.6 per cent in India, 214 per cent in Bangladesh, 75.5 per cent in Europe and 3.9 per cent in its home market of the UAE, compared with the same period last year, when movement restrictions affected operations.
The second Covid-19 wave and subsequent lockdowns curbed the movement of goods in India and Bangladesh, which affected revenue growth in both markets.
In Europe, the business continued to expand, driven by revenue growth from the UK and central European markets.