RAK Ceramics, the world’s largest ceramic tile manufacturer, has defied the global economic slowdown and construction slump with an impressive 20.2 percent increase in net profit for the year 2009.
The company has announced a net profit of AED 261.9 million for the year 2009, registering a 20.2 percent increase from AED 217.9 million in 2008. The company also saw its total sales surging to AED 3.77 billion in 2009 from 3.23 billion in 2008.
The general assembly meeting of RAK Ceramics held at Al Hamra Convention Centre here today approved a 10 percent bonus share issue to the shareholders. The meeting was attended by H.H. Sheikh Mohammed bin Saud Al Qasimi, member of the RAK Ceramics Board of Directors.
Dr. Khater Massaad, CEO of RAK Ceramics, said that 2009 has been a milestone year for the company despite the prevailing global economic conditions as RAK Ceramics for the first time crossed annual revenue of USD 1 billion.
“The profit growth achieved by RAK Ceramics comes in the backdrop of the strategic initiatives implemented by the company from 2004-2009, during which it completed an ambitious expansion plan which allowed the company to position itself among the largest global ceramic manufacturers,” Dr Massaad said.
“The company has also made several investments in forward and backward integration of its value chain by strategically investing in joint ventures and projects and successfully spinning off cost centres into profit centres. Last year, RAK Ceramics was able to leverage its export relationships in over 135 countries in its core ceramic markets and continued to foster growth of investments made in related businesses.”
Dr Massaad added that in addition to improving its overall profitability, RAK Ceramics has been able to reduce its overall loans by AED 354 million.
The company clocked global sales of 100.7 million square meters of ceramic tiles in 2009, up from 92.3 million square metres in 2008 and global sanitary wares sales climbed from 2.8 million pieces in 2008 to 3.5 million pieces in 2009. The total assets of the company also rose to AED 5.2 billion in 2009 from AED 5 billion in 2008.
The financial summary presented at the meeting noted that RAK Ceramics maintained a successful track record of profitability when most of its international competitors of similar size have either shown negative profit or very little profit. The company has been able to continuously control raw material costs by material substitution and improving formulations. Further, the company’s capacity expansion drive has allowed it to distribute increased fixed overheads over larger sales and production base.
On the outlook for 2010, the financial summary pointed out opportunities following the revival of regional economic growth with stable oil prices and the company’s ability to upgrade and deliver high value products following the recent investments. The company’s strategy for the future would involve leveraging of market diversity while continuing to improve operating efficiency.
Hamad Al Mutawaa, Managing Director of RAK Ceramics and Dr Mohammed Abdullatif, member of the board of directors, also attended the meeting.
