RAK Ceramics, one of the world's biggest producers of ceramics, reported an 18 per cent drop in its first-quarter net profit as impairment losses climbed and revenue decreased as the coronavirus pandemic hit.
Net profit for the three months ending March 31 plunged to Dh30.2 million, the company said in a statement to Abu Dhabi Securities Exchange where its shares trade. Impairment losses on trade receivables and dues from related parties rose almost five-fold to Dh6m while revenue dropped 3 per cent to Dh593m.
Selling and distribution expenses increased 10 per cent year-on-year to Dh104.1m. Finance costs also rose.
“The nature of our business is closely linked to the construction and hospitality sector[s], which were heavily affected by the pandemic,” Abdallah Massaad, group chief executive of RAK Ceramics, said on Wednesday.
“We expect this situation to impact our performance in the next few months but we are confident given our stable results in the first quarter, our strong foundations and a sound business model, we will be able to face this unprecedented challenge and move forward.”
RAK Ceramics is implementing a raft of measures to mitigate the impact of Covid-19 on its business in different markets. The company completely shut down production in India and Bangladesh and reduced its production in the UAE. It also took measures to manage its liquidity, including cutting discretionary expenses and placing non-essential capex plans on hold.
Total revenue in Saudi Arabia increased significantly when compared to the same period in 2019, driven by an 80.8 per cent increase in tiles revenue. The company is optimistic about long-term growth in Saudi Arabia once the economic recovery gets under way, it said in the statement.
Companies across the world are reporting lower profits in the first quarter due to the pandemic. The global economy could experience the worst recession this year since the 1930s. The International Monetary Fund last month projected a 3 per cent contraction in 2020 and said the outlook for the world economy is worse than during the 2008 global financial crisis.
Founded in 1989, RAK Ceramics exports to more than 150 countries through a network of hubs in Europe, the Middle East and North Africa, Asia, North and South America and Australia.
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
Fight card
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- Kem Ljungquist (Denmark) beat Mourad Omar (Egypt) TKO
- Michael Lawal (UK) beat Tamas Kozma (Hungary) KO
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- Darren Surtees (UK) beat Kane Baker (UK) KO
- Chris Eubank Jr (UK) beat JJ McDonagh (Ireland) TKO
- Callum Smith (UK) beat George Groves (UK) KO
the pledge
I pledge to uphold the duty of tolerance
I pledge to take a first stand against hate and injustice
I pledge to respect and accept people whose abilities, beliefs and culture are different from my own
I pledge to wish for others what I wish for myself
I pledge to live in harmony with my community
I pledge to always be open to dialogue and forgiveness
I pledge to do my part to create peace for all
I pledge to exercise benevolence and choose kindness in all my dealings with my community
I pledge to always stand up for these values: Zayed's values for tolerance and human fraternity
The specs
Engine: 3.9-litre twin-turbo V8
Power: 620hp from 5,750-7,500rpm
Torque: 760Nm from 3,000-5,750rpm
Transmission: Eight-speed dual-clutch auto
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Price: From Dh1.05 million ($286,000)
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UAE currency: the story behind the money in your pockets
Tightening the screw on rogue recruiters
The UAE overhauled the procedure to recruit housemaids and domestic workers with a law in 2017 to protect low-income labour from being exploited.
Only recruitment companies authorised by the government are permitted as part of Tadbeer, a network of labour ministry-regulated centres.
A contract must be drawn up for domestic workers, the wages and job offer clearly stating the nature of work.
The contract stating the wages, work entailed and accommodation must be sent to the employee in their home country before they depart for the UAE.
The contract will be signed by the employer and employee when the domestic worker arrives in the UAE.
Only recruitment agencies registered with the ministry can undertake recruitment and employment applications for domestic workers.
Penalties for illegal recruitment in the UAE include fines of up to Dh100,000 and imprisonment
But agents not authorised by the government sidestep the law by illegally getting women into the country on visit visas.
Results
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2. Ireland Cameron Hanley – Aiyetoro, David Simpson – Keoki, Paul Kennedy – Cartown Danger Mouse, Shane Breen – Laith. Team total 200.25/202.84 – P 12 (jump-off 51.79 – P17) Prize €40,000
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Company%20profile
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The specs
Engine: Dual 180kW and 300kW front and rear motors
Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
Price: From Dh359,900 ($98,000)
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