RAK Ceramics, one of the world's biggest producers of ceramics, reported a 15 per cent drop in third-quarter net profit as expenses rose and operating income fell amid the pandemic-induced slowdown.
Net income for the three months to the end of September declined to Dh33 million ($9m) from Dh39m reported at the end of the same period last year, the company said in a statement to the Abu Dhabi Securities Exchange, where its shares trade.
Selling and distribution expenses climbed to Dh107m for the period, from Dh98m in the year earlier period. Quarterly operating income fell 29 per cent to Dh66.82m from a year earlier.
Total revenue, however, increased 0.2 per cent year-on-year to Dh625.7m in the third quarter, driven by growth in Saudi Arabia and European markets. Excluding the tableware business, revenue increased 4.8 per cent on annual basis, the company said.
Despite headwinds, business has picked up pace in the third quarter, as production bounced back to pre-Covid-19 levels and core business revenue is growing, Abdallah Massaad, group chief executive of RAK Ceramics told The National on Wednesday.
"[However,] we don’t know the outlook yet," Mr Massaad said. "No one can predict these days, [but] as of today, things are going well and every day is better [than the last]. We are cautiously optimistic."
The second quarter was "shock for everyone" but all of the company's business lines are now stable, Mr Massaad said.
“There is no escaping that our business was heavily impacted earlier in the year, but we are confident in our ability to adapt, recover and deliver value to our shareholders in the long term."
RAK Ceramics exports its products including sanitary ware and tiles, to more than 150 countries through a network of distributors in Europe, the Middle East and North Africa, Asia, Americas and Australia. The company also has production plants in India and Bangladesh.
Sales in Saudi Arabia improved, with third-quarter revenue from the kingdom, the Arab world's largest economy, rising 95.8 per cent to Dh137.8m on an annual basis.
The imposition of anti-dumping duties on tiles from China and India by the GCC Industrial Cooperation Committee since June this year also supported revenue growth during the quarter, the company said.
Revenue in Europe increased 12.9 per cent to Dh91.5m, while India rebounded to pre-Covid levels of Dh66.7m.
The company said it scaled up production in the UAE to meet demand from Saudi Arabia. In Bangladesh, production has resumed at 100 per cent capacity, while in India it's 80 per cent, Mr Massaad said.
RAK Ceramics will explore opportunities to enter new markets when there's more global market stability and visibility on future trends, he said. It has no plans to exit any export market or close down any of its business lines.
“We know that the market is not growing, but we are trying to increase our market share with our strong fundamentals and innovations," Mr Massaad said.
The company launched an anti-microbial sanitary ware product line in the third quarter as customers become more hygiene conscious during the pandemic.
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Treaty of Friendship between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates
The United kingdom of Great Britain and Northern Ireland and the United Arab Emirates; Considering that the United Arab Emirates has assumed full responsibility as a sovereign and independent State; Determined that the long-standing and traditional relations of close friendship and cooperation between their peoples shall continue; Desiring to give expression to this intention in the form of a Treaty Friendship; Have agreed as follows:
ARTICLE 1 The relations between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates shall be governed by a spirit of close friendship. In recognition of this, the Contracting Parties, conscious of their common interest in the peace and stability of the region, shall: (a) consult together on matters of mutual concern in time of need; (b) settle all their disputes by peaceful means in conformity with the provisions of the Charter of the United Nations.
ARTICLE 2 The Contracting Parties shall encourage education, scientific and cultural cooperation between the two States in accordance with arrangements to be agreed. Such arrangements shall cover among other things: (a) the promotion of mutual understanding of their respective cultures, civilisations and languages, the promotion of contacts among professional bodies, universities and cultural institutions; (c) the encouragement of technical, scientific and cultural exchanges.
ARTICLE 3 The Contracting Parties shall maintain the close relationship already existing between them in the field of trade and commerce. Representatives of the Contracting Parties shall meet from time to time to consider means by which such relations can be further developed and strengthened, including the possibility of concluding treaties or agreements on matters of mutual concern.
ARTICLE 4 This Treaty shall enter into force on today’s date and shall remain in force for a period of ten years. Unless twelve months before the expiry of the said period of ten years either Contracting Party shall have given notice to the other of its intention to terminate the Treaty, this Treaty shall remain in force thereafter until the expiry of twelve months from the date on which notice of such intention is given.
IN WITNESS WHEREOF the undersigned have signed this Treaty.
DONE in duplicate at Dubai the second day of December 1971AD, corresponding to the fifteenth day of Shawwal 1391H, in the English and Arabic languages, both texts being equally authoritative.
Signed
Geoffrey Arthur Sheikh Zayed
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