Apollo Tyres Profits Rocket 125%

Apollo Tyres Ltd has reported a 125 per cent increase in annual net profits, rising from 1.2 to 2.7 billion rupees (£33.42 million). Operating profits grew 50 per cent to 6.1 billion (£75 million), from 4.1 billion in 2006/07. Consolidated revenues grew by 9 per cent, while operating profit showed a growth of 50 per cent from 4.1 billion to 6.1 billion rupees. Net sales grew 9 per cent to 47 billion rupees. Apollo also detailed how its retread business is also booming – sales of DuraTread retreading materials grew 139 per cent in the period.

However, the company reported a worsening raw material situation, with crude and raw material prices rising sharply in the final quarter of the last financial year. At the beginning of the quarter crude was around $90 a barrel, while by the quarter end it had crossed $113/barrel. Rubber moved from 92 rupees/kg to 116 rupees/kg in the same period.

Commenting on the results, Onkar S Kanwar, chairman and managing director, Apollo Tyres Ltd, said: “It’s been a year of consolidation and a year of planning which will result in numerous expansion projects being launched this year. This year will be Apollo’s year of unprecedented investments across our operations in India, South Africa and Europe. Given this, the improvement in our profitability ratios is heartening, but tough times stare us in the face with all-time highs in almost all our raw materials, inflation and the spectre of a global slowdown.”

During the course of this year Apollo established branded passenger car retail outlets – ‘Apollo Radial World’ in India; and ‘Dunlop Zone’ in South Africa; announced the construction of a Greenfield passenger car tyre manufacturing facility in Hungary; and reported a 105 per cent increase in PCR exports from India and 125 per cent increase in South African exports in general.

Announcing the results, Apollo’s board also recommended a dividend payout of 50 per cent, to be approved at the company’s AGM later in the year.