RAK Ceramics (Bangladesh) Limited saw a 70 percent decline in profit in the first quarter of the current calendar year compared to same period last year due to a decline in sales.

According to the company's unaudited consolidated financial statements for the first quarter published on its website, the net profit substantially declined to Tk 4.62 crore from Tk 15.64 crore during the corresponding period of the past calendar year.

This is RAK Ceramics' lowest net profit in the first quarter in the past five years.

Overall sales decreased to Tk 177.07 crore from Tk 200.93 crore in the same period last year, representing a decline of nearly 12 percent, which was attributed mainly to a reduction in market demand, the company said.

It added that the decrease in profit was due to selling products at a very competitive price in order to contend with unhealthy competition.

According to the Bangladesh Ceramic Manufacturers and Exporters Association, there are more than 70 ceramic industries operating in Bangladesh with core products being tiles, tableware and sanitaryware.

Total investment, both local and international, in the industry is around $1.8 billion. The sector lured in foreign investment mainly from China and the Middle East. These joint venture partnerships include RAK Ceramics, Fu Wang and China-Bangla.

Another reason for the decrease in profit was a rise in financing expenses due to the increased cost of borrowing as well as a spike in interest rates, it said.

Therefore, the company's earnings per share (EPS) decreased from Tk 0.37 to Tk 0.11 in the first quarter.

Its consolidated net asset value per share was Tk 17.40 as of March 31 this year while it was Tk 17.21 on the same day the year prior.

The company booked a net profit of Tk 61.83 crore in 2023, falling from Tk 67.15 crore in 2022.

However, sales of RAK Ceramics increased to Tk 781.93 crore in 2023 compared to Tk 743.53 crore the preceding year. At the same time, its cost of sales increased by 9 percent.

The company declared a 10 percent dividend in 2023, providing an EPS of Tk 1.44.

Shares of RAK Ceramics closed at Tk 29 on the Dhaka Stock Exchange yesterday, declining by 2.68 percent.