Operational efficiencies helped UAE-based RAK Ceramics to post a strong third quarter net profit despite challenges due to supply chain disruptions and higher logistics costs, Group CEO Abdallah Massaad told Zawya on Sunday.

Massaad is positive about the next quarter, although much would depend on demand picking up along with global economic recovery. “We are monitoring the disruption to the global supply chain too and we are hopeful that with the vaccination programme the recovery of the world economy will continue,” he told Zawya.

RAK Ceramics posted a net profit of 63.4 million dirhams ($17.2 million), a year on -year (y-o-y) jump of nearly 87 percent. Q3 2021 revenue increased 9.4 percent y-o-y to 684.8 million dirhams. Its stock was trading over 2 percent higher at 2.85 dirhams at 1 p.m. on Sunday.

Massaad said the company will focus on expanding operations in Saudi Arabia, even including starting a production facility there. “Saudi Arabia as a single market is one of our biggest markets. We are looking to have a facility to serve the market as we've done in India and grow.” For the quarter under review, the company’s revenue from Saudi Arabia was 127.5 million dirhams.

On the impact of the 12 percent customs duty imposed by the Kingdom in July this year, Massaad said the company has applied for exemptions from the taxes and he was hopeful of obtaining the waiver soon.

With construction projects being put on hold in the UAE, RAK Ceramics is eyeing the retail renovation market. “We believe that the UAE market, as a mature market, will see a lot of renovation and thus demand for our product offering, which is not one element in the houses but is used everywhere in the construction area. We have become a lifestyle solution provider," Massaad said.

The UAE, which is the company’s strongest market, accounted for 132 million dirhams in revenue in Q3.

In the UAE, the company was also helped by the anti-dumping duty, ranging between 23 percent and 106 percent on imported tiles from India and China, which came into effect in Q2 2021.

(Reporting by Brinda Darasha; editing by Seban Scaria) 

brinda.darasha@refinitiv.com 

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© ZAWYA 2021