RAK Ceramics incurs Tk11cr loss in 9 months, poor gas supply blamed

RAK Ceramics (Bangladesh) experienced a 19% decline in its revenue during the first nine months of 2024, as it failed to fully utilise its production capacity due to disrupted gas supply as well as political regime change, according to the company's financial statements.

The ceramics manufacturer said lower gas supply significantly impacted its production leading to a loss of Tk11 crore during the January-September period. 

At the same time of 2023, its net profit was Tk40.88 crore, according to its financials.

After a board of directors meeting held today (24 October), the company revealed its nine-month financials for 2024.

According to the un-audited consolidated statements, its sales declined to Tk453.02 crore, which is lower from Tk560.14 crore in the same time of the previous year. 

In an explanation regarding the financials, the company said that sales decreased by 19.12% due to demand-supply gap because of underutilisation of the plant's capacity caused by interrupted gas supply from the national grid.

"Additionally, production and sales were significantly impacted in the third quarter due to unprecedented political disruption," it reads.

It added, "As a result of the low production and sales and as fixed costs had to be paid for full capacity, regardless of utilisation, the gross profit margin dropped from 24.97% to 18.29%, and net profit decreased by 127.13% due to decline in gross profit as well as increased in finance expenses due to liquidity crisis caused by the mentioned challenges, which was managed through bank financing."

Losses incurred for two consecutive quarters

Among the three quarters of 2024, RAK Ceramics incurred loss in the two consecutive quarters amid a decline in sales for the third quarter in a row. 

In the first quarter, its revenue decreased by 11.87% due to a reduction in market demand as well as allowing more credit periods to customers to increase sales, and it made a profit of Tk4.62 crore.

In the second quarter, its revenue declined by 21.59%, and it incurred a loss of Tk95 lakh due to a reduction in the ground of non-availability of adequate gas supply and more holidays especially two Eid holidays.

Tk15 crore loss in Jul-Sep

In the September quarter, its revenue declined by 24.77% to Tk134.46 crore and it incurred a loss of Tk14.77 crore. 

The loss per share stood at Tk0.35. At the same time as the previous year, its EPS was Tk0.29.

At the same time as the previous year, its sales were Tk178 crore and profit was Tk12.35 crore. 

In 2023, RAK Ceramics made a profit of Tk61.83 crore and paid a 10% cash dividend to its shareholders. 

RAK Ceramics shares closed at Tk22.30 each yesterday, 2.19% lower than the previous trading session.