RAK Ceramics to invest Tk 525m to upgrade tiles plants
Its EPS jumps 600pc in nine months for Jan-Sept
FE REPORT | Thursday, 28 October 2021
RAK Ceramics (Bangladesh) Ltd, the country's largest tiles and sanitary-ware maker, has planned to invest Tk 525 million to upgrade its existing tiles plants to enhance production capacity.
"The board of directors of the company has decided to upgrade the machinery of existing tiles plants --plant-1, plant-2 and Plant-4," said the company in a filing with the Dhaka Stock Exchange (DSE) Wednesday.
The estimated total investment is Tk 525 million.
"After proposed upgradation of machinery, the company is expected that tiles production capacity will increase by 2,400 square meter (estimated) per day," according to the company.
Currently, the company's annual production capacity is 10.32 million square meter of tiles.
RAK Ceramics, which is engaged in the manufacture and sale of a wide range of ceramic tiles, bathroom sets and sanitary-ware products, was listed with the Bangladesh capital market in 2010 under the book building method.
The company has reported a stellar business growth in the first nine months of this year riding on a 'new marketing strategy and reduction of cost of sales'.
The company's consolidated earnings per share (EPS) increased to Tk 1.47 for January-September 2021, up by a whopping 600 per cent, from Tk 0.21 in the corresponding period, according to another disclosure on Wednesday.
The company has reported its consolidated EPS of Tk 0.46 for July-September 2021 as against Tk 0.29 for July-September 2020.
Its consolidated net operating cash flow per share (NOCFPS) was Tk 0.41 January-September 2021 as against Tk 1.05 for January-September 2020.
The consolidated net asset value (NAV) per share was Tk 16.88 as on September 30, 2021 and Tk 15.89 as on September 30, 2020.
The company also informed that due to the revised and responsive business strategy taken by the management, sales has increased by 41.93 per cent from Tk 3,412.39 million to Tk 4,843.27 million.
Due to increase in sales and decreases of cost of good sales in nine months compared to the previous period which resulted in an increase of earnings per share, according to the filing.
"Reduction of corporate tax rate by 2.5 percentage points in the current fiscal year also impacted profit after tax eventually, improving earnings per share".
But, cash collection from the customers has not been increased in the same proportion due to allowing additional credit terms during the pandemic period which is impacting in net operating cash flow inversely, it added.
Each share of the company, which was listed on the DSE in 2010, closed at Tk 47 on Wednesday, losing slightly by 0.21 per cent. Its shares traded between Tk 26 and 53.90 in the last one year.
RAK Ceramics disbursed a 10 per cent cash dividend in 2020. In 2019, it provided a 15 per cent cash dividend.
The company's paid-up capital is Tk 4.27 billion and authorised capital is Tk 6.0 billion, while the total number of securities is 427.96 million.
The sponsor-directors own 72.10 per cent stake in the company, while institutional investors own 18.18 per cent, foreign investors 0.37 per cent and the general public 9.35 per cent as on September 30, 2021, the DSE data showed.