RAK Ceramics, one of the world's biggest producers of ceramic products, reported a more than 3 per cent rise in first-quarter net income as revenue grew despite rising cost pressures and global supply chain challenges.
Total comprehensive income attributable to owners of the company for the three months through to the end of March climbed to Dh74.4 million ($20.3m), the company said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
Quarterly earnings before interest, taxes, depreciation and amortisation increased by 2.9 per cent to Dh129.7m while revenue at the end of the reporting period jumped 8.3 per cent to more than Dh783m.
“RAK Ceramics achieved a strong set of results in first quarter of 2022 despite the ongoing economic challenges weighing in, namely on input prices, energy costs and supply chain,” group chief executive Abdallah Massaad said.
The financial performance was supported by key initiatives realised in the first quarter of 2022, he said.
These initiatives are aimed at driving further top-line growth by enhancing the company's brand positioning, strengthening its profitability through increased production efficiencies and improving liquidity by tightening its collection policy.
Manufacturers around the globe are facing headwinds as global supply chain challenges remain and energy prices continue to rise amid a commodities super-cycle.
Oil rallied to slightly below $140 a barrel this year before giving up some gains. Emirates NBD, Dubai’s largest bank, expects crude to average $120 a barrel this year.
The sharp rise in energy prices has stoked inflation, reducing consumer spending power and adding to raw materials and input costs for manufacturers.
There is “no doubt” that manufacturers have been negatively affected by inflation this year, Mr Massaad said.
“We already got hit. This year, inflation came and [there was] also uncertainty and disruption in supply chain. I believe this situation is bit more complicated than inflation [impact alone],” he said.
“Fortunately, we are in a stable region, a place we can get our raw materials, energy and we are able to get our manpower … and be efficient.”
RAK Ceramics has been successful in adjusting prices selectively to partly offset additional costs while still maintaining the company’s market share across different locations, he said.
“We deal with it today market by market, month by month and any developments [taking place].”
The company remains focused on positioning itself as a trusted lifestyle solution provider as it works on expanding and optimising its portfolio, he said.
Founded in 1989, RAK Ceramics serves clients in more than 150 countries through its network of operational centres in Europe, the Mena region, Asia, North and South America and Australia.
It specialises in the manufacture of ceramic wall and floor tiles, tableware, sanitaryware and taps.
RAK Ceramics achieved a strong set of results in first quarter of 2022 despite the ongoing economic challenges
Abdallah Massaad,
group chief executive of RAK Ceramics
The company, which plans to set up a manufacturing unit in Saudi Arabia this year, said its position in the Arab world’s biggest economy continues to strengthen, despite the imposition of a customs duty of 12 per cent.
Its tiles and sanitaryware revenue in the kingdom jumped by about 20 per cent in the first three months of the year.
The company's revenue in the UAE remained stable, with an increase of about 1 per cent during the first quarter, supported by the launch of its e-commerce platform, the company said.
In Europe, revenue increased by about 9 per cent, driven by a rise in selling prices that partially offset the increased logistics and input costs.
RAK Ceramics, which signed an agreement in March to fully acquire Germany’s Kludi Group at a valuation of €39m ($42.9m), is looking to purchase more assets, Mr Massaad said.
“We are still looking for acquisitions, no doubt. Not only acquisitions, greenfield [projects] and acquisitions,” he said.
Mr Massaad said the company was excited about the Kludi deal, which is expected to be concluded by the end of this month.
“We do see a lot of growth potential in this company,” he said.
RAK Ceramics, which invested less than Dh100m in capital expenditure in 2021, intends to increase spending this year as it looks to boost production capacity at its factories in the UAE, India and Bangladesh.
“It will depend of what [development] comes during the year. I can't give you a number but it will be much more than Dh100m,” Mr Massaad said. “We are in growth mode.”
In numbers
- Number of children under five will fall from 681 million in 2017 to 401m in 2100
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- an average of 2.1 children per woman is required to sustain population growth
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Opening weekend Premier League fixtures
Weekend of August 10-13
Arsenal v Manchester City
Bournemouth v Cardiff City
Fulham v Crystal Palace
Huddersfield Town v Chelsea
Liverpool v West Ham United
Manchester United v Leicester City
Newcastle United v Tottenham Hotspur
Southampton v Burnley
Watford v Brighton & Hove Albion
Wolverhampton Wanderers v Everton
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
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Defined Benefit Plan (DB)
A defined benefit plan is where the benefit is defined by a formula, typically length of service to and salary at date of leaving.
Defined Contribution Plan (DC)
A defined contribution plan is where the benefit depends on the amount of money put into the plan for an employee, and how much investment return is earned on those contributions.
UAE currency: the story behind the money in your pockets
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
The Perfect Couple
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Rating: 3/5
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
UAE v Gibraltar
What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)
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