CERA | A Quick View on Arab Ceramic Co : A cheap stock with solid fundamentals despite challenges

    Arab Ceramics – Ceramica Remas (CERA EY) posted, few days ago, its financial results for H1 2021 recording a 65% YoY surge in revenues to EGP421.4mn on estimated growth in both volumes sold and selling prices. Revenues grew at a 5-year CAGR of 9.3% during the period 2015-2020. Pre 2019, local sales contributed more than 70% of total revenue. The company’s exports started to remarkably increase since 2019 to constitute an average of 57% of total sales during the past two years. Historically, tiles represented an average of around 75% of the company’s total sales while the remaining 25% is from sanitary ware sales.


    Moreover, gross profit soared 80% YoY to EGP76.4mn in H1 2021 yielding an enhanced margin of 18.1% vs. 16.6% a year ago. EBITDA margin improved as well to 15.5% during the interim up from 12.2% in comparative period. Gross & EBITDA margins averaged 14% and 10% respectively over the past five years.


    On the bottom-line front, earnings hiked by more than 7 folds to EGP37mn vs. only EGP5mn in H1 2020 thanks to the enhancement in top-line. Earnings increased at a 5-year CAGR of 1.5% during 2015-2020.


    The company recorded a net debt position of EGP48mn at the end of June 2021 as compared to EGP82mn on December 31, 2021. Net debt-to-equity and net debt-to-(TTM)EBITDA ratios recorded 0.16x and 0.45x respectively as of June 30, 2021. Our


    Download (258.46 KB)