Saudi Ceramic’s quarterly performance best in last 5 years, says CEO

Majed Al-Issa, CEO, Saudi Ceramic Co.

Saudi Ceramic Co. reported its best quarterly performance during the last five years in terms of sales volume and profit margins across all segments, chief executive officer (CEO), Majed Al-Issa, told Argaam in an exclusive.

He noted that the company achieved sales growth of 12% in Q1 2021, compared to the previous quarter, due to increased demand in the construction and contracting sector in the Kingdom. In addition, profit margins increased along with the company’s initiatives to reduce direct and indirect costs in plants and increase operating efficiency. 

All segments of the company recorded excellent results, most notably the improvement of red brick products and the sanitary ware products, as it returned to profitability after more than three years of losses. On the other hand, retail sales increased by over 25%, compared to the same quarter last year.

The CEO pointed out the reduction of financing costs by SAR 6 million, a decline of 57%, due to the company’s payment of a good part of its liabilities during the past period, estimated at about SAR 330 million. 

“Despite this improvement, the challenges have been and continue to be significant at this stage as we live in the COVID-19 outbreak in light of the disruption of supply chains and high raw material costs and transport prices. We are working hard to overcome any difficulties in the next phase,” he said.

Al-Issa added that Saudi Ceramic will continue to develop its products and expand its plants, where the capacity of the tiles cutting lines will be increased from 300,000 square meters per month to more than one million square meters per month, along with the development of products and sizes, expected to be completed by 2021-end.

In addition, the company plans to develop many sanitaryware products such as sinks and hanging seats, expand the plastics plant by adding new products to meet the need of the company’s plants and other markets.

The Saudi-listed firm is looking at manufacturing toilet supplements such as mixers and others, expand its retail sector through the opening of new showrooms, as well as expanding the production of porcelain by establishing a new plant in accordance with the company’s strategy in developing its products and strengthening its market share in this segment.

On the Capital Market Authority’s (CMA) approval to list Natural Gas Distribution Co. (NGDC) shares on Nomu - Parallel Market and its impact on the company, Al-Issa said that Saudi Ceramic is the second-largest shareholder in NGDC and one of its largest customers.

The purpose of the investment was primarily strategic and its listing in the parallel market undoubtedly supports its objectives of expansion and growth, he added.

Saudi Ceramic reported a net profit of SAR 70.7 million in the first quarter of 2021, compared to SAR 10.6 million in the same period in 2020.