RAS AL KHAIMAH, UAE, Feb 15: RAK Ceramics' net profit in 2015 recorded an increase of 10.2 per cent to touch Dh310.3 million. This was driven by major enhancements in core businesses and a turnaround of non-core business activities.
Overall gross margin increased to 28.2 per cent. Gross margin from core businesses rose to 29.3 per cent from 28.4 per cent in 2014 driven by an increase in tile sales. This was coupled with higher sanitaryware and tableware sales.
The board approved a cash dividend of 30 per cent payout to shareholders. The board also approved a stock dividend of five per cent.
In 2015, RAK Ceramics focused on growing its core businesses - tiles, sanitaryware, faucets and tableware in the GCC, India and Bangladesh.
Capital expenditure was a major part of RAK Ceramics' investments in 2015. It spent Dh305 million on expanding core businesses such as sanitaryware capacity in Bangladesh by 25 per cent. Core business Capex was up 85 per cent from 2014.
Abdallah Massaad, RAK Ceramics' Group CEO, said: "The continued growth in our bottom line is the result of our meticulous planning and commitment to expanding our core businesses. We are aware of the economic and geopolitical factors that will continue to challenge our business in 2016 and may impact our performance, but we are confident that we have the right mechanisms and measures in place to mitigate those risks."
"As we have wrapped up a strong 2015, we look forward to an even stronger 2016 driven by positive momentum and strategic investments made this year."
RAK Ceramics worked on the turnaround of a number of non-core businesses, including Al Hamra Construction and ElectroGroup, both of which it has got back to profitability ahead of a potential sale.
Margins were supported by the sale of other non-core businesses, Laticrete RAK, RAK Piling, RAK Logistics, RAK Gypsum and Al Hamra Aluminium in the UAE, as well as RAK Mosfly, RAK Paints and RAK Pharmaceuticals in Bangladesh, and the sale of core but non-profitable businesses such as RAK Ceramics Sudan. Continued disposal of assets and a further turn-around in remaining non-core operations will further improve net margins in 2016. ?Khaleej Times