Mubasher: MubasherTrade Research said that RAK Ceramics’ financial results for the second quarter has missed estimates of both MubasherTrade Research and consensus by 26%, after earnings decreased by 31% year-on-year to AED 55 million.
MubasherTrade Research has maintained the Buy/Moderate Risk rating at a PT of AED 4.48/share and ETR of +40%, neutral on results with a ‘stable’ outlook.
“The sharp fall was driven by higher net finance expense (+2.3x YoY) from AED 6 million in Q2 2015 to AED 21 million in Q2 2016. Financing costs associated with Sharia compliant debt increased to AED 6.9 million vs. AED 0.96 million, in addition to a foreign exchange loss (pertaining to operations) of AED 5.8 million in Q2 2016 vs. foreign exchange gain of AED 5.4 million in Q2 2015,” the report said.
RAK Ceramics’ bottom line was pressured by a fall of 6% YoY in revenues to record AED 757 million, beating MubasherTrade estimates of AED 704 million (+8%).
“Revenues came lower due to less contribution from non-core business (-32% YoY), sharp drop in Indian operations, and a slowdown in GCC, mainly KSA,” it added.
