RAK Ceramics Profit Rises as Company Hires Barclays for StrategyDana El Baltaji
RAK Ceramics, the world’s largest maker of ceramic tiles, posted the biggest jump in full-year profit since 2009 on production efficiencies at its factories.
Net income rose 21 percent to 272 million dirhams ($74 million) from 224 million dirhams in 2012, the Ras al Khaimah, United Arab Emirates-based company said in an e-mailed press release. Total revenue rose 11 percent to 3.52 billion dirhams.
“We had improvements in efficiencies in our plants worldwide, and together with rising prices, we saw an increase of profits across our operations,” Chief Executive Officer Abdallah Massaad said in a phone interview yesterday. “The board is proposing a 25 percent cash dividend for 2013.”
The company said last week it hired Barclays Plc and BNP Paribas SA to explore “a range of strategic alternatives and transactions” after Bloomberg reported earlier this month that the banks are advising Ras Al Khaimah’s ruling family on the sale of a 25 percent to 50 percent stake. Massaad said the company hasn’t been informed of any “transfer of ownership.”
The company is spending about 300 million dirhams this year to expand in India and Bangladesh, and upgrade technology in Ras Al Khaimah, Massaad said, up from 115 million dirhams last year.
The shares jumped 22 percent so far this year to 3.84 dirhams, double the 11 percent rise of Abu Dhabi’s ADX General Index. The stock advanced 188 percent last year, it’s biggest annual increase on record.
RAK Ceramics, which last year reduced its outstanding debt 10 percent to 1.325 billion dirhams, has no plans to sell bonds or sukuk this year, Massaad said. The company exports to more than 160 countries.
Ras Al Khaimah is one of the seven sheikhdom’s that make up the United Arab Emirates.