Image Credit: Gulf News Archive

DUBAI: RAK Ceramics’ quarterly net profits were down 51 per cent to Dh55.1 million but its revenues remained stable and its core gross profit margin reached an all-time high of 34.7 per cent, the firm said on Thursday.

The reason for the fall in net profits was due to the Dh34.8 million sale last year of RAK Warehouse, which pushed the quarterly net for Q2 2017 to Dh113.2 million. Disregarding that sale indicates a 29.7 per cent fall in net, according to Gulf News’ calculations.

“Net profit was also impacted by an increase in energy costs, foreign exchange losses, general and distribution expenses and investments in Saudi Arabian entities, brand building expenses in India and in the US for the tableware business,” the firm said in a media statement.

RAK Ceramics Group CEO Abdallah Massaad said, “Our performance this quarter was stable and in line with expectations. Tile and sanitary ware sales were strong in the UAE, Saudi Arabia, India and Europe.

“Our tableware business has performed well, driven by growth in the US market and the taps and faucets business has also shown growth in the UAE and Europe.

“Looking ahead to the remainder of the year, we are optimistic about our ability to execute on our Value Creation Plan, increase our profitability in core and value markets, drive product innovation and to optimise our production.”

Overall revenues fell 0.3 per cent to Dh719.2 million, due to a 31.9 per cent fall in non-core revenues as it discontinued its rough grading business in line with its value creation plan, the firm said.

RAK Ceramics’ core revenue grew by 2.6 per cent year on year, led by strong sales in the UAE and India, as well as strong performance by the tableware business driven by growth in Europe and the US markets.

Tile and sanitary ware revenues in the UAE, Saudi Arabia, India and Europe increased by 2.7 per cent, 17.2 per cent, 2.2 per cent and 6 per cent respectively year on year.

Total gross margin increased 110 basis points to an all-time high of 24.4 per cent, with core gross margins up 50 basis points to an all-time high of 34.7 per cent, the statement added.