Apollo reports slight drop in annual revenues, increase in net profit

The Board of Directors of Apollo Tyres Ltd today approved the company’s audited financial results for the fourth quarter (January to March) and the entire 2014-15 financial year. At the same time, the Board recommended a dividend payout of 200 per cent, to be approved by the shareholders at the tyre maker’s Annual General Meeting later in the year.

Consolidated annual revenues, across operations closed at Rs 127.3 billion (£1.3 billion), down 4.4 per cent from last year’s Rs 133.1 billion. During the same period the company’s operating profit rose 0.6 per cent to Rs 19.8 billion (£199.9 million) and a net profit was up 2.7 per cent to Rs 9.8 billion (£99.0 million). Net sales for the fourth quarter closed at Rs 31.0 billion (£313.0 million) and operating profit amounted to Rs 5.1 billion (£51.5 million), while quarter net profit rose nine per cent to reach Rs 3.1 billion (£31.3 million).

“Despite a healthy volume growth in the passenger car tyre segment in Europe, and nearly 30 per cent volume growth in the truck-bus radial segment in India, our topline has not grown, primarily due to the South African operations, and also because of the depreciation of euro,” commented Onkar S Kanwar, chairman of Apollo Tyres Ltd. “Having said that, our effort towards faster market expansion outside India, has resulted in a strong growth of more than 20 per cent in exports out of India.”

Kanwar however noted a black cloud on the horizon for this coming year: “The recent increase in import duty of natural rubber from 20 per cent to 25 per cent in India will be a challenge going forward.” He added that this change in duty rate is “likely to result in further increase in import of cheap tyres into the country, which can be imported at ten per cent duty, and will hinder the growth of capacity investments by the domestic tyre industry, in addition to making us uncompetitive.”

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