Dubai: RAK Ceramics’ first-quarter net profit increased to Dh60.4 million compared to Dh58.7 million during the same period last year despite challenging global financial conditions and downward pressures from increased gas prices, foreign exchange fluctuations and hyperinflation.

The company said in a statement on Monday its consolidated revenue increased by 0.4 per cent to Dh744.1 million.

Total losses from hyperinflation reached Dh15.4 million during the quarter, therefore adjusted net profit (excluding impact of hyperinflation) was Dh75.8 million, an increase of 22 per cent compared to the same period last year.

Adjusted net profit (excluding impact of hyperinflation of Dh15.4 million) was Dh75.8 million, an increase of 22 per cent compared to the first quarter of last year.

During the quarter, the company concluded the sale of RAK Pharmaceuticals and Moshfly in Bangladesh and Laticrete RAK LLC in UAE, which resulted in a Dh39.1 million profit. Additionally, it signed a share purchase agreement to sell RAK Sudan and took a Dh48.4 million impairment charge on this investment. The sale of Sudan will decrease the impact of hyperinflation in the long run.

“The results demonstrate our continued stability against a backdrop of very challenging conditions and market volatility. As we continue implementing our refocused strategy, we will proceed with our mission to divest from ‘non-core businesses’ and divest ‘non-strategic assets’ in line with our Value Creation Initiatives,” Abdallah Massaad, Chief Executive Officer of RAK Ceramics, said in a statement.

Notwithstanding irregular growth across several markets, Saudi Arabia recorded an 18 per cent quarter-on-quarter increase in revenues resulting from a proactive strategy set up last year to strengthen and consolidate the distribution network and ramp-up B2B capabilities.

Sanitary ware revenues increased by 0.7 per cent to Dh110.9 million in line with the company’s focus on expansions in sanitary ware business across the UAE, India and Bangladesh. Sanitary ware sales in the UAE increased by nine per cent to Dh83.4 million.

Forex losses reached Dh21.2 million caused by depreciation of the Euro by nearly 10.5 per cent from the fourth quarter of last year, mostly a translation loss.