RAK Ceramics increased net profit by 10.2 per cent to Dh310.3 million in 2015, which it said had been driven by the value creation plan introduced after Samena Capital took a 30.6 per cent stake in the business in mid-2014.
The company said that gross margins increased by 2.3 per cent to 28.2 per cent as a result of its focus on a “core business” of tiles, sanitary ware, faucets and tableware in the GCC, India and Bangladesh, but also through “substantial” gains made from the sale of non-core businesses.
Overall revenue fell by 1.5 per cent to Dh3.1 billion, though, and revenue in the “core” business was 2.9 per cent lower at Dh2.59bn, thanks largely to an 8 per cent drop in tile sales.
The company said that it had worked on the turnaround of a number of other non-core businesses, including Al Hamra Construction and Electrogroup, both of which it is looking to get back to profitability ahead of a potential sale. It said it would continue to dispose of non-core assets as planned, and would look to turnaround other, non-performing businesses.
Elsewhere, it increased its stakes in subsidiaries in Iran and India, buying out minority shareholders to take full control of the businesses. Earlier this month, it also bought out joint venture partners in subsidiaries in the UK and Germany, arguing that this will give it greater control over operations.
Abdallah Massaad, the chief executive of RAK Ceramics, said: “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.”
He added: “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.”
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