RAK Ceramics (RAKCEC) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was AED 776.5 million, down 0.7% year-on-year due to currency headwinds, but up 0.7% on a constant currency basis.

• Net profit after tax declined 22.3% year-on-year to AED 48.9 million, impacted by KLUDI transformation costs and new UAE tax rules.

• Gross profit margin improved by 33 bps to 39.7%, driven by efficiency gains and product mix.

• EBITDA for Q1 2025 was AED 135.6 million, down 10.3% year-on-year.

• Net debt increased to AED 1.43 billion, mainly due to higher capital expenditure.

Financial highlights

• Total revenue for Q1 2025 was AED 776.5 million, down 0.7% year-on-year.

• Tiles revenue grew 1.2% to AED 449 million; Sanitaryware revenue declined 6.5% to AED 105.5 million.

• Tableware revenue fell 4.5% to AED 85.9 million; Faucets revenue dropped 4.4% to AED 111.7 million.

• Gross margin was 39.7% in Q1 2025, up 33bps year-on-year.

• EBITDA margin at 17.5%, down from 19.3% year-on-year.

Outlook and guidance

• CapEx guidance for 2025 is AED 350-400 million, with AED 97 million spent in Q1, mainly on large format tile upgrades.

• Focus remains on quality, innovation, sustainability, and market share growth.

• KLUDI transformation and production rationalization are key priorities, with improvement expected as production shifts to U.A.E.

• New large-format tile facility in UAE to be operational by end of 2025.

• Bangladesh operations are being monitored closely, with hopes for gas supply improvement soon.