Above, workers at the porcelain production line of RAK Ceramics. Jaime Puebla / The National
Above, workers at the porcelain production line of RAK Ceramics. Jaime Puebla / The National

RAK Ceramics profit margin rises after refocus



RAK Ceramics profit fell during the first half of the year to nearly Dh150 million, while revenue fell after the company refocused on its core products.

The Abu Dhabi-listed company reported a net profit of Dh149.9 million, down from Dh151 million during the first half of last year. Net profit margins increased to 9 per cent in the first six months, compared to 8.6 per cent for the corresponding period last year.

The decrease [in revenue] came because “we are exiting the non-core activities and focusing on core businesses, which from now will be tiles, sanitaryware, tableware, faucets and adhesives,” said Abdallah Massaad, the chief executive of RAK Ceramics.

He predicted that revenue would continue to fall until output capacity for core products was sufficiently increased.

Revenue from non-core businesses, which included construction and property activities, decreased by 34 per cent.

Revenue from ceramic products increased by 3.9 per cent to Dh1.41bn, accounting for 84.9 per cent of the total revenue. The new focus follows the private equity firm Samena Capital’s acquisition of a 30.5 per cent of the company from Ras Al Khaimah’s ruling family.

In April, Samena Limestone, a subsidiary of Samena Capital, acquired the stake for an estimated Dh957m.

The emirate’s Ruler, Sheikh Saud bin Saqr Al Qasimi, who is also the RAK Ceramics chairman, continues to hold 20 per cent of the company.

“We are working closely [with Samena], and as private equity players they have the mentality of growing the business and creating value, which tallies with what we want,” Mr Massaad said.

The company exports 75 per cent of its products. Its largest market is the Arabian Gulf, with Saudi Arabia as number one, followed by the United Kingdom and Germany in Europe.

“Europe is a stable market but not growing, while the Gulf is a fast-growing market, so it balances out,” Mr Massaad said.

In the second quarter, the UK market saw no growth in construction output compared with the first quarter, according to the UK’s Office for National Statistics. In Germany, construction output decreased 2.5 per cent in May over the same period in the previous year.

In Saudi Arabia, the value of projects planned or under way is worth US$1 trillion, according to Meed.

RAK Ceramics also said that it would invest $100m in increased capacity in Bangladesh and India. It is adding a bigger kiln to increase production in Bangladesh by 35 per cent in a year’s time.

In India it is weighing an IPO to fund its expansion there, Mr Massaad said last week.

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Nayanthara: Beyond The Fairy Tale

Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni

Director: Amith Krishnan

Rating: 3.5/5

UAE currency: the story behind the money in your pockets
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Heavily-sugared soft drinks slip through the tax net

Some popular drinks with high levels of sugar and caffeine have slipped through the fizz drink tax loophole, as they are not carbonated or classed as an energy drink.

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A 680ml can of Arizona Iced Tea costs just Dh6.

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Electoral College Victory

Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate. 

 

Popular Vote Tally

The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.

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Opening on October 15 and running until November 15, the free exhibition opens at The Galleria mall on Al Maryah Island, and has already been seen at the Jimmy Carter Presidential Library and Museum in Atlanta, the American Museum of Natural History in New York, and the London School of Hygiene and Tropical Medicine.

 

Squads

India (for first three ODIs) Kohli (capt), Rohit, Rahul, Pandey, Jadhav, Rahane, Dhoni, Pandya, Axar, Kuldeep, Chahal, Bumrah, Bhuvneshwar, Umesh, Shami.

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Colette

Director: Wash Westmoreland

Starring: Keira Knightley, Dominic West

Our take: 3/5

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