RAK Ceramics, one of the largest ceramics and porcelain lifestyle solutions providers in the world, said it is well-positioned to take on the ongoing market challenges, as it announced its financial results for the quarter ended June 30, 2024.

The total revenue of the lifestyle solution brand in Ras Al Khaimah decreased by 10.9% YoY to AED 777.0 million in Q2 2024 and by 11.2% YoY to AED 1.56 billion in H1 2024, predominantly due to ongoing geopolitical challenges, supply chain disruptions, and economic slowdowns impacting demand across all core markets except the UAE.

In Q2 2024, gross profit margin increased by 110bps YoY to 39.6% and in H1 2024, it increased by 90bps YoY to 39.4% owing to continued efforts to drive efficiencies across all operations supported by lower natural gas prices in UAE.

Ebitda decreased to AED 136.9 million in Q2 2024, compared to AED 155.4 million in the same period last year. Ebitda margins have remained stable at 17.6%, compared to 17.8% in Q2 2023. In H1 2024 Ebitda decreased 7.9% YoY at AED 288.0 million, however margin improved 70bps YoY at 18.5%.

Net profit after tax decreased to AED 51.0 million recording a margin of 6.6%, compared to AED 75.1 million with a margin of 8.6% in Q2 2023. The impact of 9% UAE Corporate Tax is AED 6.4 million for Q2 2024. In H1 2024 net profit after tax was recorded at AED 113.9 million compared to AED 155.2 million.

Net debt increased by AED 187.1 million quarter on quarter to AED 1.55bn in Q2 2024. Net debt to Ebitda increased from 2.13x in March to 2.50x in June 2024.

Abdallah Massaad, Group CEO, RAK Ceramics said: “This quarter demonstrated continued headwinds across businesses, driven by geopolitical tensions, supply chain disruption, and economic slowdown in key regions.

“There has been a continued suppression of consumer spending in key markets driven by high interest rates, inflationary pressures and liquidity crunch.

“Despite these challenges, we remain committed to further investment in our brand and the protection of margins.

“As a business we made the decision not to lower prices to compete with lower quality alternative products. Our products offer a differentiated level of quality and design – and our margins are a reflection of our customers’ recognition of this superior quality product.

“We remain confident in the long-term growth drivers of the business and that the addition of further production facilities will drive further value for both customers and shareholders, while allowing us to remain competitive.

“We are well-positioned to take on the ongoing market challenges and are encouraged by the positive long-term outlook for the business, specifically in the UAE.” – TradeArabia News Service