Ras Al Khaimah (UAE)-based RAK Ceramics has reported a 32.1 per cent increase in tile sales in Saudi Arabia at Dh114.7 million ($31.23 million) and a 3.5 per cent increase in the UAE during the third quarter of the year.
Changes in India’s management put downward pressure during the quarter but plans are in place to quickly revamp business activity and deliver on strategy, it said in a statement while announcing the Q3 performance.
Net profit grew 43 per cent to Dh82.1 million compared with Dh57.4 million in the corresponding quarter of 2014. The performance was largely driven by an increased level of activity across the company’s core businesses in core markets and margin improvements in tiles and non-core businesses.
“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,” it said.
“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,” said chief executive Abdallah Massaad.
In October 2015, RAK Ceramics announced the full acquisition of the remaining 7.57 per cent minority share of its Indian subsidiary, RAK India. The announcement followed the company’s acquisition of the 20 per cent minority stake of its Iranian facility, RAK Iran in August. With 100 per cent ownership of its Iran and India operations, the management has long-term plans for full management and control of its facilities. Potential is big in both markets, with the company planning to ramp up capacity to 9 million pieces in Iran, capitalising on the export potential out of this market once sanctions are lifted.
Additional capacity expansions in sanitaryware are planned in the remaining core markets, 22 per cent in the UAE and 25 per cent in Bangladesh in line with the refocused strategy.