Announcing its results for the quarter ended March 31, RAK Ceramics said its revenue peaked in five years to reach AED 723 million ($ 197 million), up 22% from last year, mainly driven by growth in all major markets.
It declared a net profit of AED 62.7 million, exceeding pre-pandemic profit levels (AED 36.9 million in 2019).
According to RAK Ceramics, operations in global markets continued to improve in the first quarter, leading to the best start to the year recorded by RAK Ceramics since 2016, he added.
The total gross profit margin for the first quarter of 2021 reached a record high of 35% thanks to increased revenue, improved efficiency and optimization of production lines.
Q1 2021 revenue increased 78.5% in Saudi Arabia, 2.1% in United Arab Emirates, 67.0% in India, 18.9% in Bangladesh and 22.7% % in Europe compared to the same period in 2020, thanks to the improvement in economic activity.
In Saudi Arabia, the Company’s strategy continues to bear fruit. The imposition of anti-dumping duties on tiles from India and China in the kingdom initially resulted in increased demand for RAK Ceramics’ products.
Capitalizing on this demand, the company invested in differentiated tiles and new showrooms, thus developing significant brand equity in the market. RAK Ceramics is now the essential supplier of high-end ceramic products in the Kingdom.
In the United Arab Emirates, despite the impact of Covid-19, the workforce has not been reduced and production has reached its highest level in 5 years due to increased demand from Saudi Arabia.
In India, RAK Ceramics implemented several initiatives to streamline the business and also boosted its sales strategy. Improving economic activity and positive business sentiments in the real estate industry have resulted in increased demand and steady income growth.
In Bangladesh, production is running at full capacity. RAK Ceramics introduced new products for the rural and urban segments of the market, thus improving the visibility of the brand. This has led to an increase in market share.
In Europe, activity has exceeded pre-pandemic activity levels. RAK Ceramics has been able to expand its customer base in Central Europe and the UK by differentiating itself from its competitors and providing superior product management.
In view of its future growth, RAK Ceramics continues to invest in brand initiatives, including collaborations with high-end designers, the franchise of retail concepts and the launch of factory outlets in the United Arab Emirates and in Saudi Arabia.
Regarding the strong results, Group CEO Abdallah Massaad said: “I am pleased to report strong financial results for the quarter, driven by record levels of revenue and profitability. the impact of the pandemic led to an accelerated recovery from the third quarter of 2020. “
“Today, RAK Ceramics is in a strong growth position, surpassing pre-pandemic operating levels, with gross profit margins reaching an all-time high,” he said.
“For the remainder of 2021, our priority will be to invest in brand equity, develop our business in Saudi Arabia and protect our market share in the United Arab Emirates and Bangladesh,” he added.
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