Hit by COVID-19, Q1 Ceramic Sales Dropped Globally

10 Jun 2020/CTW


As the chairman of Mohawk said “the world changed during the first quarter”, the outbreak of COVID-19 has brought enormous difficulties to the world economy. Not to mention small and medium-size enterprises, big publicly-traded companies as well have been pulling through a hard time. Ceramic sales in these companies all registered falls during the first three months of 2020.

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Mohawk: Sales Dropped by 6.4%

Global Ceramic Dropped 6%

The Q1 financial report of Mohawk clearly reveals the impact of the COVID-19 pandemic, with net sales dropping 6.4% from $2.4 billion to $2.3 billion and net earnings down from $122 million to $111 million YOY. 


Mohawk’s Global Ceramic Segment, including Daltile, American Olean, Eliane, Marazzi, Emilgroup, Ragno, Kerama Marazzi and Kai, saw a similar YOY decline in sales by 6% to 848.45 million dollars in the first quarter of 2020. Each of the regions where Mohawk Industries’ ceramic production activities operate was affected by the coronavirus at different points.


Jeffrey S. Lorberbaum, Chairman and CEO, commented “The world changed during the first quarter, and we are now managing through an unprecedented situation.” He said Mohawk have been reducing capital expenditures, cutting non-essential expenses and putting stock purchases on hold until the environment improves.


While the U.S. ceramic business remained under pressure from LVT, Mohawk continued to gain market share in Mexico by expanding its porcelain products and larger sizes. Business also grew both in Europe and in Russia, where the group has started up additional porcelain production to make super large sizes, as well as the new plant to produce coordinated premium sanitaryware. Sales likewise increased in Brazil, where work on Eliane’s new Unit III in Cocal do Sul was completed.

SCG: Sales Declined by 6%

Revenues Even Last Year

SCG’s Q1 Operating Results showed revenue figures similar to the previous quarter despite the COVID-19 outbreak, with increased revenues from cement-building materials and packaging businesses offsetting decreased revenues from the chemicals business. 


The company’s unreviewed operating results for Q1 registered a 6% decrease YOY of the sales to 105,741 MB (US$3,379 million), mainly from lower chemicals prices due to weak global demand. Meanwhile, profit for the period reached 6,971 MB (US$223 million), a decline of 40 % YOY and 2% QOQ due to the decline in the performance of the chemicals business in light of decreased product margins.


Revenue from performance businesses outside of Thailand, including export sales from Thailand registered 44,859 MB (US$1,434 million) or 42% of total Revenue from Sales, an increase of 3% YOY. Of which, SCG’s Revenue from export sales from Thailand registered 24,319 MB (US$777 million) or 23% of total Revenue from Sales, down 9%.


According to the report, SCG is able to maintain company operations and production during the COVID-19 pandemic by implementing a full-blown business continuity management plan. To ensure consumer safety and convenience, the company turns to digital technology to deliver products, services and solutions along with a strategic preparedness plan to mitigate disruption impacts and capture new opportunities.

Lamosa:Sales Fell by 1%

Domestic Sales Increased but Exports Declined

Lamosa, the largest ceramic group in Mexico, sees a YOY fall of revenues by 1% in the first quarter of this year, which reached to 4404 million pesos (US$202 million). Its domestic sales increased by 1%, but foreign sales declined by 6% due to the coronavirus outbreak.


In the year ended 31/12/2019, the group led by President Federico Toussaint Elosúa had already recorded a poor export performance, down 7% on 2018. This was offset by stronger domestic sales despite the slowdown of Mexico’s economy and construction sector, to 1.2 billion pesos (US$55 million).


Lamosa’s ceramic tile sector, which makes up 74% of total revenues, was the worst hit with sales down 4% to 3266 million pesos (US$149 million). By contrast, the adhesives segment reported a 9% revenue growth to 1138 million pesos (US$52 million)


During the presentation of the quarterly figures, Grupo Lamosa’s top management confirmed that, while the true scale of the crisis remains unclear, the negative effects will be more evident in the second quarter of the year despite the measures adopted to minimise their impact.


RAK: Sales Decreased by 2.7%

Net Profit Fell 18.1%

RAK Ceramics’ Q1 report showed a 2.7% decrease of revenues to Dh592.8 million (US$161.3 million), primarily due to lower sanitary ware and tableware revenue. Its net profit fell by 18.1% YOY to Dh30.2 million (US$8.2 million), with a margin of 5.1% decrease in revenue and investments in upgraded branding and showrooms, as well as higher freight costs.


RAK’s total gross profit margin increased by 110 bps due to improvements and efficiencies in operations of the tiles business. This was largely driven by efficiencies in the UAE, where production lines were optimised to match demand.


Total revenue in Saudi Arabia increased significantly when compared to the same period last year, driven by an 80.8% increase in tiles revenue. RAK Ceramics’ operations in Saudi Arabia followed the UAE business model, which has proved effective. The company is optimistic for long-term growth in Saudi Arabia post-Covid-19 economic recovery.


On the Q1 performance, Group CEO Abdallah Massaad said RAK Ceramics had implemented cost efficiency measures across all its operations, while prioritizing the health and safety of its workforce. RAK also had taken measures to ensure liquidity facing closure of retail channels by launching alternative options, including a virtual reality showroom experience on our website.


Revenues Declined by 23.81%

In the first quarter, Monarch Sanitary Ware registered a total of RMB 793 million (US$112 million) revenues, down by 23.81% YOY. The net profit is RMB 51 million (US$7 million) with a YOY decrease of 23.12%. The Oceano Ceramics earned RMB 731 million (US$103 million), falling by 22.78%, and the net profit is RMB 59.5 million (US$8 million), down by 13.99%. The report says, the outbreak of COVID-19 led to suspension of production and work, which thus affected the revenues and payments from downstream enterprises.


Monalisa Ceramics

Revenues Declined by 19.75%

Monalisa Ceramics has a revenue of RMB 485 million (US$68 million) in Q1, down by 19.75% YOY. The net profit is RMB 40 million (US$6 million) , down by 25.64%. According to the report, the delay of work resumption of the downstream enterprises is the main reason in the sales reductions. In the first three months, Monalisa spurred up the construction of its production base in Guangxi Province, which was put into operation at the end of February.

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This is the 389th  issue. 

Editor:  Lynn



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