Fuel, power price hikes bite RAK Ceramics’ profit
However, earnings per share (EPS) declined to Tk0.67 from Tk1.01 between January and June a year ago
The country's leading tile manufacturer RAK Ceramics reported a 33.73% year-on-year drop in net profit to Tk28.52 crore in the first half of 2023.
This decline was attributed to inadequate gas supply, hikes in gas and electricity prices, and volatility in the foreign exchange market.
However, earnings per share (EPS) declined to Tk0.67 from Tk1.01 between January and June a year ago.
In a half-yearly unaudited statement, the UAE-based multinational company mentioned that its net sales increased by 0.29% to Tk381.39 crore on the back of a revised and responsive business strategy taken by the management.
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The company said its gross profit margin has dropped from 29.66% to 25.25%. This decrease was primarily due to several factors, including the non-availability of adequate gas, an increase in gas and electricity prices, significant volatility in the foreign currency market, disruptions in the global supply chain, and consequent increases in raw material prices and freight charges.
According to its financials, RAC Ceramics experienced a decline in major revenue earner ceramics product sales. However, its revenue from power generation and security services saw an increase in the January–June period.
Ceramics product sales declined by 1.92% to Tk530.86 crore, while revenue from power generation increased by 64% to Tk36.22 crore, and revenue from security services increased by 14% to Tk5.42 crore.
The net operating cash flow per share became negative at Tk0.08.
Regarding this deviation, the ceramics product manufacturer stated that the collection has not increased proportionately. The settlement of multiple import bills during the reporting period resulted in higher vendor payments compared to the collection.
In June last year, RAK Ceramics decided to invest Tk902 crore to build a new tile factory in Gazipur to meet the growing demand for the construction material in the country.
According to sources, the new factory will be capable of producing 15,000 square metre of tiles per day.
Around 1,500 people will be employed in the factory, which is expected to go into operation by 2025.
The company initially estimated that the new factory would generate Tk93 crore in profit a year on average.
