Despite challenging environment, JK Tyre posts higher full-year profits
JK Tyre & Industries reports a 29 per cent year-on-year increase in net profit for its 2013-14 financial year. During the 12-month period between 1 April 2013 and 31 March 2014, the Indian tyre maker achieved turnover of Rs 82.8 billion (£833.7 million), nine per cent higher than in the prior financial year. Operating profit was up 41 per cent to Rs 8.9 billion (£89.6 million) while pre-tax profit grew 42 per cent to Rs 3.5 billion (£34.9 million). The 29 per cent expansion in the company’s bottom line brought net profit to Rs 2.6 billion (£26.5 million). The company has announced a 50 per cent equity share dividend.
Operating profit for the final quarter was Rs 2.0 billion (£20.0 million) and net profit amounted to Rs 450 million (£4.5 million).
“The company has performed well in the face of the challenges during the year 2013-14,” stated Dr Raghupati Singhania, chairman and managing director of JK Tyre & Industries Ltd. “Commercial vehicle production declined and even passenger cars recorded a negative growth, first time ever in the decade. This led to subdued demand for tyres. To combat the sluggish market conditions, JK Tyre undertook several strategic actions by renewing its thrust in the replacement market as [well as] also adding new OEMs. The company widened its network of customer touch points, which enabled it to deliver better service to its customers. Aggressive efforts resulted in export recording a 23 per cent increase during the year.” Total exports for both JK Tyre’s Indian operations and its JK Tornel subsidiary in Mexico amounted to Rs 16.05 billion (£161.6 million), a 20 per cent year-on-year increase. “JK Tornel, Mexico continues to perform well, which has added to the bottom line of JK Tyre,” the chairman and managing director noted.
Dr Singhania added that JK Tyre is continuing its “focus on innovation” and has introduced several new higher value-added products both in the commercial and the consumer tyre segments; he commented that these have met with an “enthusiastic customer response.” He also shared that the expansion programme to increase capacity at the company’s PCR and TBR units in Chennai, a project being carried out at a cost of Rs 14.30 billion (£144.0 million), is scheduled for completion in phases by early 2016.