DUBAI: UAE’s RAK Ceramics reported that its net profit reached Dh281.7 million with $1 billion turnover in 2014.
RAK Ceramics continued momentum in its performance with net profits reaching Dh281.7 million, an increase of 3.5 per cent over 2013, despite booking losses of Dh56.5 million arising from hyperinflation and currency fluctuations in Sudan and Iran.
However, adjusted net profit (excluding impact of hyperinflation) increased by 14.1 per cent to Dh338.3 million in 2014. Ebitda (Earnings before interest, taxes, depreciation, and amortiation) recorded an increase of 2.9 per cent to Dh584.4 million as a result of the company’s strategic alignment plans in 2014.
The company’s board of directors has adopted a new dividend policy. It is committed to returning capital to shareholders via a sustainable dividend policy, aiming at a pay-out ratio of at least 60 per cent of consolidated net income subject to consideration of the business outlook, capital requirements for growth opportunities, expansion plans, optimal leverage levels and healthy cash reserve in addition to regulatory approvals.
For 2014, the board approved a total cash dividend distribution of 35 fils per share. The high pay-out was determined after considering an 25 fils per share ordinary pay-out and an additional extraordinary 10 fils per shares as a result of the company’s divestment of its non-core business operations during 2014.
The year 2014 represented a stabilising year for RAK Ceramics in line with its growth plans and continued focus on growing ‘core-businesses’, identified as tiles, bathware, tableware and taps and faucets, in focus markets of the Gulf Cooperation Council, India and Bangladesh, which underpinned 2014 financial performance and was the dominant theme of the year.
Revenue from ‘core-businesses’ reached Dh2.8 billion in 2014, decreasing by 1.9 per cent compared to 2013. Bathware revenues were up by 9.3 per cent to Dh448.5 million.
A major component of the re-focused strategy in 2014 was on scaling down ‘non-core businesses’ and divesting ‘non-strategic assets’. Initial agreements were signed to exit RAK Sudan and RAK Laticrete while the exit of RAK Pharmaceuticals in Bangladesh was concluded in 2014.
In addition, activities in Iran and China were reduced. Non-core revenues reached Dh482.5 million, with a decrease of 26.3 per cent, in line with strategy to continue scaling down the UAE contracting businesses.
On the strategic front, June 2014 marked a transformational point for RAK Ceramics, when Samena Capital acquired 30.6 per cent of the business and implemented a ‘Value Creation Plan’ aimed at unlocking value for shareholders.
