RAK Ceramics PJSC, one of the largest ceramics’ brands in the world, announced its financial results for the year ended 31 December 2019.
The company reported total revenues of AED2.57 billion, a decline of -5.6% due to challenging regional market conditions and increased competition in export markets. On constant currency of 2018, revenue decreased by -2.8% YoY.
The company reported a net profit of AED205.2 million and an increase in total gross profit margins of 33.2%, +120bps YoY, as a result of the continued focus on product differentiation, production optimisation and improved operational efficiencies, by leveraging automation and process enhancements.
The tableware and sanitaryware businesses continued to show strong growth with revenues increasing by +2.2% and +4.0% YoY respectively. Increased revenue in the tableware segment was supported by strong growth in USA, UAE and Asian markets, whereas the sanitaryware business showed growth in all markets, except UAE and Bangladesh.
Furthermore, the Board of Directors announced a 15% cash dividend and 5% bonus shares.
Saudi Arabia has demonstrated strong performance in revenue growth and total revenue increased by +9.1% YoY to AED271.9 million supported by growth in the wholesale business. The projects segment in Saudi Arabia was stable and tiles revenue grew by +6.9% to AED248.7 million and sanitaryware revenue grew by +41.6% to AED23.2 million.
Indian operations are being streamlined by ramping up the production of slabs, increasing exports and reducing production costs. RAK Ceramics continues to invest in strengthening its brand value in India by opening flagship showrooms in key cities across India.
Abdallah Massaad, Group CEO, RAK Ceramics commented: “In 2019, we witnessed stable performance, as we saw an increase in our total gross profit margin and our total EBITDA. Saudi Arabia has been a strong market for us predominantly in tiles, where we witnessed a substantial growth in Q4 which reflected positively on the YoY growth.
Looking ahead, our priorities for 2020 are to maintain our market share in the United Arab Emirates, Bangladesh and India; further grow our market in Saudi Arabia; and strengthen the overall performance of distribution entities in Europe.
We will continue to invest in our branding and product differentiation, and we plan to increase our retail footprint by opening new showrooms in core markets. I look forward to reporting on these updates in due course.”