Apollo profits up 64% in fiscal 2013-14

Annual and final quarter results for Apollo Tyres’ 2013-14 fiscal year, which ended on 31 March, show a solid increase in net profit for the India-headquartered tyre maker. In the 12 months between the start of April 2013 and the end of March 2014, the company achieved net sales of Rs 133.1 billion (£1.3 billion); this represents year-on-year sales growth of four per cent. Full-year operating profit rose 19 per cent over the previous year to Rs 19.7 billion (£197.2 million), while operating profit margin rose from 12.1 per cent to 14.8 per cent. Net profit jumped 64 per cent year-on-year to Rs 10.1 billion (£101.1 million).

Net sales in the final quarter of the 2013-14 year rose six per cent year-on-year to Rs 32.1 billion (£321.4 million). Operating profit, at Rs 4.8 billion (£48.1 million), was 20 per cent higher than in the last quarter of the prior fiscal year, and net profit doubled year-on-year to Rs 2.8 billion (£28.0 million).

Commenting on these results, Apollo Tyres Ltd chairman Onkar S Kanwar said: “Last year, we saw the consolidation of our two brands – Apollo and Vredestein –and their entry into newer markets. All this, along with better product and customer mix across geographies has helped us report incremental revenues. Recovery in the commercial vehicle segment in India in the new fiscal, after witnessing negative growth in the past year, will have a positive impact going forward. Car sales in Europe have also risen continuously for the last three quarters, which is again a positive for us.”

Breaking revenues down into geographic segments, Apollo Tyres reports that India accounted for 62.1 per cent of total segment revenue, Europe for 27.9 per cent and South Africa for 9.0 per cent. The remainder was “other” markets. When dividing revenues between the company’s operating entities, Asia Pacific, Middle East & North Africa (APMENA) accounted for 62 per cent while Europe, Sub Saharan Africa and Americas (ESSAA) held a 38 share.

Regarding Apollo’s plans for the coming year and beyond, Onkar Kanwar added that “we are aggressively pursuing organic growth opportunities. Considering the increased demand for our tyres in Europe, along with capacity constraints in our existing facility in Enschede, the Netherlands, has made us prioritise our investment into a Greenfield facility in the region. The Board has given us approval to initiate plant building activities in Eastern Europe, at a project cost of 500 million euros over the next four years, funded with accruals and debt at our European subsidiary.”

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