Apollo Tyres grows topline

Apollo Tyres grows topline

Margins hit by sharply rising input costs

February 11, 2011

The Board of Directors of Apollo Tyres Ltd approved the company’s unaudited financial results for the 3rd quarter and 9 months of the financial year 2010-11. The Board met in Chennai city for the first time, after the formal inauguration of the company’s next generation tyre manufacturing plant. 

Speaking on the results Onkar S Kanwar, Chairman, Apollo Tyres Ltd said: “It has been 9 months of investments, planning and fine tuning our products and strategies. The effect of a 70% rise in natural rubber prices in the past year, shows clearly in our results for this period. Despite this, all Operations have continued to grow. As a company we continue to seek ways to move beyond the prevailing adverse business conditions and concentrating on newer markets and to provide our customers with better products that match their evolving needs.” 

Quarter 3 Consolidated Performance Highlights  

FY 2010-11 (October-December) vs FY 2009-10

  • Net sales stood at Rs 23.7 billion (2368 crores) up from Rs 23 billion (2296 crores) 
  • Net profit dropped to Rs 1.2 billion (120 crores) from Rs 1.9 billion (187 crores) 
  • The consolidated financials take into account revenues of Apollo Tyres India, Apollo Tyres South Africa and Apollo Vredestein B V, Netherlands

9 months Consolidated Performance Highlights

FY2010-11 (April-December) vs FY2009-10

  • Net sales closed at Rs 61.4 billion (6138 crores) up from Rs 59.8 billion (5977 crores) 
  • Net profit fell to Rs 2.5 billion (248 crores) from Rs 3.9 billion (390 crores) 

In the 12 months between December 2009 and 2010, the raw material scenario in tyre manufacturing has undergone a sea change, primarily from the perspective of key raw material prices, which have skyrocketed beyond expectations. While natural rubber prices have moved from Rs 119/ kg to Rs 194/ kg in December 2010, they currently rule at over Rs 240/ kg. Combined with that crude oil, a key source of most other inputs has moved from US$ 76/barrel to US$ 85/barrel in 12 months, impacting all other ingredients. However, manufacturers have not been able to raise tyre prices to compensate for higher inputs costs.