Apollo Net Profit Down 52%

Apollo Tyres’ India operations profits were less than half that of last year according to the year-end financial report released today by the manufacturer (April 2008-March 2009). While net sales grew 10 per cent from 36.9 billion to 40.7 billion rupees in the period, operating profit came down to 3.3 billion from 4.7 billion rupees and net profit more than halved from 2.1 billion to 1 billion rupees. Despite the relative gloom of the full year figures, Apollo came closer to matching the January-March 2008 quarterly operating profit in the same period this year, down merely 40 million rupees from 2.14 billion to 2.1 billion. The board of directors recommended a dividend payout of 45 per cent to shareholders.

Commenting on the full-year figures, Apollo chairman and MD, Onkar S Kanwar stated that “a nearly 25 per cent higher cost of raw materials” completed a “double blow” for the company, alongside the general worldwide slowdown. However, Kanwar also sounded a note of optimism in his commentary on the figures, saying “given the circumstances, I am pleased with our performance in such a challenging environment.” He also stated that the company would be looking to improve on the figures in the financial year 2009-10, and that the final quarter of 2008-9 had showns “signs of revival…where our replacement demand has gone up by nearly 14 per cent over the same period last year.” However, the same period saw a 30 per cent drop in OEM demand.

Kanwar concluded by drawing attention to the company’s South Africa operations, which “continue to post growth in rand terms,” though this growth is also somewhat hamstrung by currency fluctuations and the country’s dependence on raw material imports. That said, the company’s statement, taking into account India and South Africa, painted an ultimately upbeat picture with the assertion that Apollo is “the only top tier Indian tyre manufacturer to have remained profitable throughout each quarter of the year 2008-9.”