RAK Ceramics reports twenty-fold increase in Q2 losses

RAK Ceramics (Bangladesh) experienced a loss of Tk 185 million in the April-June quarter this year, 20 times greater than the loss incurred in the same quarter a year earlier.

A significant rise in production costs compounded by the shortage of gas supply magnified the loss reported for the second quarter of this year, said company secretary Muhammad Shahidul Islam.

"Our overhead costs remained as high as before while production halved in the year through June." The company's loss mounted as operating costs escalated, added Mr Islam.

The company held a board meeting on Tuesday to approve its financial statements for the second quarter and the six months through June. It, however, is yet to publish the statements.

RAK Ceramics' revenue fell 2.66 per cent year-on-year to Tk 31 billion in January-June (H1) this year. It witnessed a loss of Tk 210 million during the period as opposed to a profit of Tk 36.74 million reported for the same period of the previous year.

The dollar crisis hampered imports of raw materials, which also contributed to the decline in production in H1 of the current calendar year, compared to the same period a year ago.

The company secretary, however, sees a glimmer of hope. He said, "Our company returned to full production this month following an improvement in gas supply".

Despite the poor performance, the company on Tuesday was transferred to the segment of A category stocks from junk stocks on the grounds that it had completed distribution of 10 per cent cash dividends for the year ended in December last year.

Meanwhile, the exchanges requested stock brokers and merchant bankers to refrain from providing loan facilities for the purchase of shares of RAK Ceramics in the seven days following the change of category.

RAK Ceramics had reported a profit of Tk 905 million for 2021. Annual profits started eroding in 2023. The yearly income was Tk 618 million in 2023, which shrank to Tk 27 million next year.

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