RAK Ceramics retains Tk200cr in quarterly revenues
The increase in the company’s business performance has not had any effect on its share prices
Despite a decline in construction, RAK Ceramics (Bangladesh) Limited, a leading tiles and sanitary ware manufacturer in the country, has maintained a Tk200 crore mark in revenues for the last two consecutive quarters.
The back-to-back quarterly Tk200 crore footprint is also a record for the UAE-based company in its history.
The increase in the company's business performance has not had any effect on its share prices. Its share prices have plunged 29% from February to 21 April this year. On Thursday, the RAK share price closed at Tk43.60 on the Dhaka Stock Exchange.
In the first quarter of 2022, its revenue stood at Tk200.65 crore, 15% higher than in the previous year at the same time. In the last quarter of 2021, its revenue was Tk200.79 crore.
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In the January-March quarter this year, the sales of its tiles increased 20% and sanitary ware sales grew 8% compared to the same quarter a year ago.
RAK Ceramics Bangladesh posted Tk0.57 in earnings per share for the first quarter of 2022 against Tk0.50 in the previous year at the same time.
"The revised and responsive business strategy helped the company improve total sales, alongside better control of costs," the company said in a statement.
Sadhan Kumar Dey, chief operating officer (COO) and chief financial officer (CFO) of RAK Ceramics Bangladesh, told The Business Standard that " Following the Covid-19 pandemic, the Russia-Ukraine war has led to a slowdown in the construction sector due to rising prices of construction materials. However, our products are used in the final stage of construction work or in the interior section, so the shock of the downturn has not affected us yet.
"The effects of the slowdown will be felt in the next quarter. If the situation improves again, demand may also increase, but so far our business is doing well," he added.
He said the price of tiles has not increased as much as other construction materials.
"Moreover, as a result of our cost reduction policy, the increase in raw material prices has not affected our ceramics products either.
This has made our business growth sustainable," he said.
The company's gross profit margin – the ratio of sales revenue to cost of production – improved to near 30% which was in decline since the end of 2018 and dropped to below 23% in 2020 . The 66-day nationwide shutdown had dragged the company down to a quarterly loss in the April-June period with a 59% drop in annual profits.
With a 200% growth in 2015-20 , Bangladesh's ceramics market grew to over Tk6,000 crore at the end of 2020. Tiles and sanitary ware account for 75% of the annual market.
Local factories are catering to 77% of the tiles market, 96% of the tableware market, and 90% of the sanitary ware market, according to RAK's 2020 annual report.
