RAK Ceramics reports first quarterly loss in 10 years
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THURSDAY, AUGUST 11, 2022
RAK Ceramics reports first quarterly loss in 10 years

Corporates

TBS Report
26 July, 2020, 06:55 pm
Last modified: 27 July, 2020, 05:41 pm

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RAK Ceramics reports first quarterly loss in 10 years

The UAE-based multinational company has reported a loss of Tk18.80 crore in the second quarter of this year

TBS Report
26 July, 2020, 06:55 pm
Last modified: 27 July, 2020, 05:41 pm
The Hatirpool showroom of RAK Ceramics. Photo: Collected
The Hatirpool showroom of RAK Ceramics. Photo: Collected

The UAE-based multinational company RAK Ceramics (Bangladesh) has reported its first quarterly loss in more than a decade due to a 66-day countrywide shutdown to curb the spread of novel coronavirus pandemic.

RAK, which manufactures tiles and sanitary ware, and does not produce ceramic tableware items, has reported a loss of Tk18.80 crore in the second quarter of this year, and loss per share was Tk0.44. 

In the same period of the previous year, the company posted Tk15.62 crore in net profit, and earnings per share was Tk0.37.

Revenue has also plunged drastically. In the April-June quarter, it earned revenue of Tk72.15 crore from ceramics – which was 63 percent lower than that of the previous year at the same time.

After paying value added tax (VAT), the consolidated net revenue stood at Tk50.31 crore in this period.

The company has two subsidiaries – RAK Power and RAK securities.

In the first half of this year, the company reported revenue of Tk273.94 crore from ceramics. After paying VAT, the consolidated net revenue stood at Tk197.22 crore.

In that period, net loss of the company was Tk3.63 crore and loss per share Tk0.09.

RAK Ceramics is in a cash crisis too due to lower collection from the market. For that reason, net operating cash flow per share was negative Tk0.57.

However, in the first quarter of this year, the net profit of the company was Tk14.97 crore.

According to the financial statement, production suspension and supply chain disruptions due to the Covid-19 pandemic caused the company to suffer a plunge in sales and incur losses. 

"Profits in the ceramic sector have already declined due to increased competition, and now sales have also collapsed due to the [novel] coronavirus. We are thinking of different plans to overcome this crisis," a RAK official told The Business Standard on condition of anonymity. 

Setting out on the Bangladeshi market in 2001, RAK's sales reached Tk887 crore at the end of 2019. The company posted 130 percent business growth over the last ten years. However, the net profit is not growing in proportion to its business growth.       

Meanwhile, the company has managed to wipe out its long-term bank loan dependency. The company had Tk60 crore bank loans even in 2016, but it repaid them fully in 2019. 

The company gave a 15 percent cash dividend to its shareholders in 2019, the lowest since RAK got listed on the country's premier bourse in 2010.   

The closing price of RAK shares was Tk26 per share at the Dhaka Stock Exchange on Sunday. In the last year, RAK shares rose to their highest price of Tk36 per share.

RAK Ceramics PJSC, UAE holds 68.13 percent of the company's total shares.

Bangladesh / Top News

RAK ceramics

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