Home ›› 20 Nov 2021 ›› Stock
RAK Ceramics (Bangladesh) Limited, a multinational company based in the United Arab Emirates, has completely recovered from the Covid-19 shock as its profit has almost touched the pre-pandemic level in the first three quarters of the current year.
In the January-September period of 2021, the ceramic product manufacturer bagged a profit of Tk 63 crore, which is more than two times higher than that of the previous year’s corresponding period.
The pandemic-induced shutdown squeezed its profit in the first nine months of 2020 to only Tk 31 crore.
If the company manages to maintain the existing profitability in the remaining three months, its yearly profit will stand at Tk 87 crore, said a research carried out by EBL Securities.
Before the pandemic, RAK Ceramics reported a profit of Tk 89 crore in 2018.
According to the research, the company’s financial expenses declined by 66.59 per cent in the first six months of 2021 as its short-term loan and lease liability reduced by 25.07 per cent and 30.76 per cent respectively during the period. It will put a positive impact on the company’s annual profitability.
Besides, the real estate sector is booming, thanks to government employees’ housing loan facility, continued money whitening provision, and single digit interest on loans.
Against such a backdrop, the business of ceramic products, which are closely related to housing, is expected to grow keeping pace with the real estate sector.
Apart from that, the number of RAK Ceramics shares held by foreign investors increased to 15.8 lakh recently, indicating their growing confidence in the company.
EBL Securities projected that the development would help RAK Ceramics fly high in the coming days.
Meanwhile, the company declared to upgrade the machinery of its tiles plant with an investment of Tk 52.5 crore in order to enhance the overall production capacity.
Its tiles production capacity is expected to increase by 2,400 square metres per day upon completion of the up-gradation process.
The share price of the multinational company has been on an upward trend since April this year.
The price, which was Tk 26.6 on April 4, increased by 98 per cent to Tk 52.7 on October 6 at the Dhaka bourse.
However, the price declined later and came down to Tk 43 on November 17.
RAK Ceramics started business in Bangladesh in 1998 and got listed with the bourses in 2010.
It carries out share trading under ‘A’ category by providing dividends regularly. It has two subsidiaries – RAK Power and RAK security and Services Pvt Ltd.
The company currently manufactures more than 2,800 types of ceramic and porcelain tiles products and more than 50 designs of sanitary ware.
Bangladesh’s ceramic industry started its journey in the 1960s and gained momentum in the last two decades.
The current market size of ceramics products is Tk 6,000 crore. Experts forecast that the industry will be a major export earner within the next five years.
A recent United States Agency for International Development report also made a similar forecast, indicating the ceramics industry of Bangladesh would be worth $1.56 billion by 2023.
Currently, there are more than 60 ceramics manufacturers in the country with 20 more facilities in the pipeline, including those making tableware, tiles, and sanitary ware.
The country can cater to 96 per cent of tableware, 77 per cent of tiles, and 89 per cent of sanitary ware demand through local production, thus indicating scopes for domestic growth, in addition to exports.
