RAK Ceramics (RAKCEC) Q4 2024 earnings summary

Executive summary

• Q4 2024 revenue increased 0.5% year-on-year to AED 870.9 million, but full-year revenue declined 6.5% to AED 3.23 billion due to global volatility, geopolitical tensions, inflation, and supply chain disruptions.

• Net profit after tax for 2024 was AED 234.1 million, down 27% year-on-year, impacted by the new UAE Corporate Tax and lower other income.

• Gross profit margin improved to 39.3% for 2024 (up 143bps YoY), with Q4 margin at 37.2% (up 163bps YoY), reflecting efficiency gains and margin improvements in key markets.

• Strategic focus on premium products, operational efficiency, digitalization, and sustainability to maintain margins amid rising competition and cost pressures.

• Investments in technology upgrades, showroom expansion, and production capacity in core markets, including ongoing KLUDI Europe transformation and Saudi greenfield project.

Financial highlights

• FY 2024 revenue: AED 3.23 billion (-6.5% YoY); Q4 2024 revenue: AED 870.9 million (+0.5% YoY).

• FY 2024 net profit after tax: AED 234.1 million (-27.0% YoY); Q4 2024 net profit after tax: AED 64.2 million (-21.5% YoY).

• FY 2024 EBITDA: AED 592.2 million (-8.5% YoY); Q4 2024 EBITDA: AED 158.0 million (-4.7% YoY); EBITDA margin for 2024: 18.3%.

• Net debt at Q4 2024: AED 1.39 billion, net debt/EBITDA at 2.35x, improved from 2.61x in Q3 2024.

• Working capital cycle improved to 181 days in Q4 2024.

Outlook and guidance

• CapEx guidance for 2025 is AED 350–400 million, with major investments in plant upgrades and production capacity.

• Dividend policy renewed: minimum AED 0.20 per share semi-annually through 2027, totaling at least AED 0.60 over three years.

• Management expects continued strength in the U.A.E. and Saudi markets in 2025, supported by real estate and mega projects, with priorities on market share growth, retail expansion, and sustainability.