Dubai:
RAK Ceramics said on Wednesday net profit for 2016 fell as demonetisation in India and sagging growth in Europe impacted sales.
Net profit for the year fell 37.1 per cent to be at Dh216 million.
The company proposed cash dividend payment of 15 fils per share. Revenues fell by 9.3 per cent on year to be at Dh2.8 billion.
Lower core revenues principally resulted from decreased sales in Saudi Arabia and India which were 41 per cent and 25.6 per cent lower YoY respectively, the company said in an emailed statement. The decrease in Saudi reflects the significant decline in government project spending and business sentiment. Lower sales in India reflect the company’s early stages in the process of rebuilding its senior leadership team and the impact of demonetisation on the economy in the fourth quarter of 2016.
“We enter 2017 with much optimism. We expect sustained growth in the UAE and Europe and a turnaround in Saudi by the second half of the year. Our performance wasn’t unexpected and we were prepared for it,” said Abdullah Massaad, Group CEO, RAK Ceramics in a statement.
“We had to take exceptional measures, including cost reduction initiatives in the UAE, to ensure long term profitability and to deliver on our promise of unlocking value to shareholders,” Massaad said.
“At the same time during 2016, we continued to make investments that will help propel the business forward in 2017, including expanding tile capacity in Bangladesh as well as sanitary ware capacity in the UAE, investments in product development and our corporate rebranding,” he added.
