Apollo Tyres: Net profits up 155% in Q3 2020-21

Apollo Tyres reports improved sales and significantly higher net profit in the three months to 31 December 2020, the third quarter of its 2020-21 financial year. The bottom-line result for the year to date is admittedly less impressive, as net profits have been watered down by costs associated with the restructuring of the Apollo Vredestein facility in Enschede, the Netherlands.

Consolidated third-quarter sales amounted to Rs 49.65 billion (£498.0 million), 14 per cent higher than a year earlier. Operating profit rose 91 per cent to Rs 10.53 billion (£105.6 million), while net profit jumped 155 per cent to Rs 4.44 billion (£44.5 million).

“Our performance across geographies, have been robust in the past quarter, and we continue to be extremely positive on the demand environment,” commented Onkar Kanwar, chairman of Apollo Tyres Ltd. “Given our planned investments in capacity, R&D, brand and distribution, along with our cost optimisation programme, we are extremely well placed to leverage demand recovery across segments and geographies. Also, the Indian Government turning to expansionary mode in FY22 budget, with a clear focus on growth, and the announcement on scrappage policy, is going to be a boost for us going forward.”

9 months to 31 December 2020

Consolidated sales during the nine months from 1 April to 31 December were Rs 120.27 billion (£1.2 billion), slightly lower than the Rs 125.45 billion achieved a year prior. Sales for Apollo Tyres’ Indian Operations grew 20 per cent on the back of improved demand from both OEM customers and the replacement segment. In Europe, despite an environment of sluggish demand, the company reports that it “continued to make inroads” in the premium segment. EBITDA rose 38 per cent year-on-year to Rs 20.5 billion (£205.6 million) but net profit nosedived 84 per cent to Rs 629 million (£6.3) as this result was impacted by a one-time expense of Rs 4.46 billion (£44.7 million) related to the company’s factory in the Netherlands.