Apollo Q3 Performance “Remarkable” – Kanwar

Apollo Tyres’ Onkar S Kanwar has called the company’s performance in the third quarter of the 2009-10 financial year a “remarkable performance”. The company chairman had ample ground for such praise – year-on-year net profit ballooned from Rs 89 million (₤1.2 million) to Rs 1.8 billion (₤24.4 million) on the back of a Rs 22.96 billion (₤311.0 million) net profit, an increase of 108 per cent from the third quarter of the 2008-09 financial year.

“It’s been a remarkable performance both in terms of the October-December quarter, as well as the nine months of the year,” said Kanwar. “While India continues to bring in about 60 per cent of the revenues, what is heartening is the performance of our Netherlands and South African Operations. This all-round show has led to higher profitability and vindicated the worth of our acquisitions and integration process.”

The consolidated financials take into account Apollo Tyres’ India Operations, revenues of Apollo Tyres South Africa and Apollo Vredestein B V, in the Netherlands, acquired in May 2009. Consolidated EBIDTA for the quarter was 16.8 per cent; 15.5 per cent in India, 10.0 per cent in South Africa and 22.3 per cent in the Netherlands. The PAT (profit after tax) margin for the company’s consolidated operations stood at 8.2 per cent; 7.7 per cent in India, 5.0 per cent in South Africa and 10.2 per cent in the Netherlands.

Net sales at Apollo’s India operations increased 47 per cent to Rs 13.2 billion (₤178.8 million) during the third quarter, while net profit jumped to Rs 1 billion (₤13.5 million). The company’s consolidated performance during the first nine months of the current financial year (April to December 2009) saw net sales increasing 62 per cent to Rs 59.7 billion (₤808.6 million) and net profit grow 372 per cent to Rs 3.9 billion (₤52.8 million). India operations results for the nine-month period include a 26 per cent increase in net sales to Rs 37.2 billion (₤503.9 million) and a 382 per cent rise in net profit to Rs 2.98 billion (₤40.3 million).

Apollo notes that the past quarter’s growth has ensured its “continued dominance in the Indian replacement and OE segments with the Apollo brand” along with growth in South Africa with the Dunlop brand and a stronger presence in the European high end passenger car winter tyres with the Vredestein brand. “The internal belt tightening of the previous year, along with the economic revival, will ensure Apollo’s ability to meet its aggressive growth targets for the year 2009-10,” the company adds.

The company says it has set aggressive financial goals for itself in the 2010 and 2011 financial years. To meet this, its greenfield facility in Chennai, in southern India, is expected to be commissioned in the first quarter of the 2011 financial year.