UAE tile, sanitaryware and brassware manufacturer RAK Ceramics has reported a revenue of AED 927million in its Q2 results, an increase of 32.3% year-on-year.
In addition, net profit increased to AED 102.2 million for Q2 2022, up 7.7% year-on-year .
Tile revennue increased by 25.9% year-on-year to reach AED 595.1 million in Q2 2022, and by 11.9% year-on-year to reach AED 1.1 billion in H1 2022.
Growth was driven by increase in volumes and in selling price across all markets – except for a stabilisation in H1 2022 figures for the Saudi Arabian market, due to the introduction of custom duty and supply disruption in Q1 2022.
Sanitaryware sales grew by 7.5% in Q2 2022 and by 10.3% in H1 2022 at AED 146.3 million and AED 301.2 million, respectively, driven by growth in all markets except Saudi Arabia.
Tableware revenue increased by 60.0% year-on-year to AED 89.3 million in Q2 2022 and 70.3% year-on-year to AED 164.9 million in H1 2022 following market rebound post-pandemic.
In the Middle East (excluding UAE and Kingdom of Saudi Arabia), RAK Ceramics revenue grew 27.0% for the reported period, compared to Q2 2021, underpinned by an increased brand exposure and expanding the distribution network.
UAE revenue grew by 24.5% driven by a growth in construction and Saudi Arabia increased by 25.6%, by securing profitable projects and expanding its retail footprint, compared to the same period last year,
While in Europe, RAK Ceramics witnessed “rigid” growth in top-line following a strengthened brand positioning despite market slowdown.
European revenue increased by 1.8% year-on-year, as higher shipping costs weighed in on bottom-line performance.
In the Indian continent, revenue in India was up by 55.4% year-on-year, driven mostly by a growth in tiles sales, following an increase in dealers and expansion in retail presence.
While in Bangladesh, revenue increased 11.3% year-on-year supported by better brand visibility and price adjustments after an increase in input costs and import freight.
Despite the growth in reveneues, RAK reports higher energy costs and currency devaluation impacted Q2 2022 bottom line.
RAK Ceramics has completed the acquisition of Germany based Kludi Group, which added AED 50.4 million in Q2 2022 revenue, including a 49% stake in its existing joint venture Kludi RAK in UAE.
According to the company, it represents an opportunity for RAK Ceramics to spearhead expansion and strengthen its core businesses across European markets, as well as strengthening its position internationally as a ceramic lifestyle solution provider.
The company, to-date, has completed 40% acquisition of RAK Porcelain, bringing RAK Ceramics ownership position up to 90% with further stake acquisitions currently under negotiations.
In addition, the company approved RAK Ceramics Bangladesh greenfield expansion project, which is estimated to add a capacity of 4.8m sqm in tiles and 400,000 brassware pieces starting in Q1 2025 and Q2 2024, repectively.
Commenting on the results, Abdallah Massaad, Group CEO, RAK Ceramics said: “Despite the unprecedented economic environment and increased global volatility, RAK Ceramics achieved a remarkably strong performance in Q2 2022, supported by key strategic and operational initiatives realised during Q2 2022.
“We remain focused on our goals to achieve a sustainable and continued growth in scale and profitability.
“In Q2 2022, we reinforced brand perception and customer experience, strengthened retail footprint and visibility, further increased production efficiencies and enhanced capacity utilisation.
“We remained diligent on optimising logistics operations with better supply chain management and inventory control, to mitigate rising challenges.
“We were also successful in maintaining an adequate liquidity position for Q2 2022, despite consolidation activity and challenging environment, enabling us to comfortably meet pay-out commitments.
“We are also proud to announce that we have concluded the acquisition of Kludi Group, launched the process of buying out RAK Porcelain’s minority positions, and approved RAK Ceramics Bangladesh expansionary project.
“We remain committed to solidifying our positioning as a global provider of premium ceramic lifestyle solutions and to continuously adding value to our shareholders by focusing on market share preservation, brand positioning, product differentiation, sustainable investments and digital transformation.”
RAK Ceramics Company has 24 factories which can produce 118 million sqm of tiles, 5 million pieces of sanitaryware, 24 million pieces of porcelain tableware and 2.5 million pieces of brassware per year.
Founded in 1989, RAK Ceramics is a publicly listed company on the Abu Dhabi Securities Exchange in the United Arab Emirates and as a group has an annual turnover of approximately US$1 billion.