, one of the world's largest ceramics brands based in Ras Al Khaimah, UAE, has announced that it has surpassed pre-pandemic levels of operation for the first three months, with record levels of revenue and profitability, reflecting resilience and strong growth of the business.
Announcing its results for the quarter ended March 31, RAK Ceramics said its revenue surged to a five-year high to hit AED723 million ($197 million), up 22 per cent over last year mainly driven by growth in all core markets.
It has reported a net profit of AED 62.7 million, outperforming pre-pandemic levels of profit (AED 36.9 million in 2019).
According to RAK Ceramics, operations across global markets continued to improve in Q1, leading to the strongest start to the year recorded by RAK Ceramics since 2016, it added.
Total gross profit margin for Q1 2021 reached an all-time high of 35% driven by an increase in revenue, an improvement in efficiencies and the optimisation of production lines.
The Q1 2021 revenue grew by 78.5% in Saudi Arabia, 2.1% in the UAE, 67.0% in India, 18.9% in Bangladesh, and 22.7% in Europe when compared to the same period in 2020, driven by improved economic activity.
In Saudi Arabia, the Company’s strategy continues to yield results. The imposition of anti-dumping duties on tiles from India and China in the kingdom initially led to an increase in demand for RAK Ceramics’ products.
Capitalising on this demand, the company invested in differentiated tiles and new showrooms, developing significant brand equity in the market. RAK Ceramics is now the go-to provider of premium ceramic products in the Kingdom.
In the UAE, despite the impact of Covid-19, workforce was not reduced, and production reached the 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. Improved economic activity and positive business sentiments in the real estate sector led to increased demand and steady growth in revenue.
In Bangladesh, production is running at optimum capacity. RAK Ceramics introduced new products for the rural and urban segments of the market, improving brand visibility. This has led to an increase in market share.
In Europe, the business surpassed pre-pandemic levels of operation. RAK Ceramics was able to increase its customer base in Central Europe and the UK by differentiating itself from competitors and providing superior product management.
With an eye on future growth, RAK Ceramics continues to invest in branding initiatives including collaborations with premium designers, franchising of retail concepts and the launch of outlet stores in the UAE and Saudi Arabia.
On the solid 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. While 2020 was a difficult year for the business, however early implementation of measures to manage the impact of the pandemic has led to an accelerated recovery beginning as early as Q3 2020."
"Today, RAK Ceramics is in a position of strong growth, surpassing pre-pandemic levels of operation, with gross profit margins reaching an all-time high," he stated.
"Looking ahead for the remainder of 2021, our priority will be to invest in brand equity, grow our business in Saudi Arabia and protect our market share in the UAE and Bangladesh," he added.
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