Saudi Ceramics, a leading provider of ceramic products such as tiles, porcelain tiles and sanitaryware, said its revenue for the fourth quarter hit SR368 million ($98.1 million) up 2 per cent over last year.
Revenue was aided by the price hike taken by the company at the beginning of Q4 2020, said Al Rajhi Capital, a leading financial services provider in the kingdom, in is review.
However, the revenue seems to have likely been impacted by volumes that were 11 per cent lower than Al Rajhi's estimate of SR414 million ($110 million).
The gross margin at 26.3% was lower (-241 bps q-o-q) and was impacted likely by unfavourable sales mix and the resultant fall in operating leverage, stated the company in its review.
"However, lower selling and administration cost, aided profitability, as net income came in at SR28 million (+103% y-o-y). This too is lower than our estimate of SR37 million," it stated.
Despite the weak Q4 volumes, Al Rajhi said its outlook on Saudi Ceramic continues to remain bullish at the back of continued strong demand for housing projects.
"Added to this, the company is one of the largest players in the region with an attractive market share in the kingdom. This, along with the recent steps taken by the government to curb cheap imports from China and India, gives Saudi Ceramic strong pricing power," it stated.
"With an improvement in revenue, we also see the potential for Saudi Ceramic’s margins to improve, at the back of improved operating leverage," it added.-TradeArabia News Service
