Amtel-Vredestein Doubles Profit in 2005
(Akron/Tire Review) After its first year of operation, Russian tyremaker Amtel-Vredestein NV ended up in the black, posting net income of $5 million in 2005 against sales of $671 million. Net sales jumped 40 per cent for the year versus 2004’s results, the company said.
However, after taking write-offs of $86 million for the year, Amtel-Vredestein had a net 2005 loss of $81 million. The write-offs were the result of the sale of its Amtel-Sibir tyre plant in Krasnoyarsk and Amtel-Carbon, its carbon black factory in Volgograd, and reduction of bicycle and truck tyre production at its Voronezh plant.
The company’s new retail subsidiary, AV-TO, now Russia’s largest tyre retailer with 104 stores, contributed $9 million to sales in 2005 after approximately two months of operating results.
This was the first earnings report from the company since it listed its shares on the London Stock Exchange in November 2005. Amtel-Vredestein said it sold 15.1 million tyres in 2005, with passenger tyre sales more than tripling to 7.4 million units from 2004’s 1.9 million tyres.
“Our positive results demonstrate that the company’s strategy of moving away from lower margin products and into higher quality, higher margin tyres is gaining momentum,” said CEO Alexei Gurin. “Our integration of Vredestein has been particularly fruitful and contributed to our improved operating margin in spite of significant increases in raw materials costs.”