Apollo Tyres annual net profit up 12 per cent, but European sales slide
On the occasion of publishing its full-year 2015/2016 financials, Apollo Tyres has reported sales of 117 billion rupees (£1.214 billion; 1.537 billion euros; US$1.757 billion) compared with 127.256 billion rupees in 2014/2015. During the same period (2015/2016) operating profit grew 3 per cent to close at 20.4 billion rupees, up from 19.8 billion rupees. Net profit increased 12 per cent to 10.9 billion from 9.8 billion rupees the year before.
At the same time as publishing the results, Apollo’s board announced that is has recommended a dividend payout of 200 per cent to be approved by shareholders at the forthcoming Annual General Meeting, later in the year.
Commenting on the results, Onkar S Kanwar, chairman, Apollo Tyres Ltd, said: “Our revenue in India, in the past financial year, has largely been impacted by the Chinese imports. The imported truck-bus radials, especially from China, occupied close to 30 per cent of the Indian replacement market for radial truck tyres, which not only impacted the domestic truck-bus radials, but also the truck-bus bias segment. With India having no anti-dumping duties, in the past fiscal on Chinese tyres, and numerous other geographies having imposed anti dumping duties on Chinese tyres, India has opened its market for low cost tyre imports from China, thereby putting at risk the huge investments made by the domestic tyre majors.”
However, fell more than 10 per cent from 35.825 million rupees in 2014/2015 to 31.737 million rupees in 2015/2016. Nevertheless, Europe remains the firm’s second largest business area. Overall consolidate revenues break-down like this: India = 69 per cent; Europe = 26 per cent and the rest accounts for 5 per cent.
Onkar S Kanwar, explained the decline in the European operation’s figures, “Our European operations have been impacted due to the SAP implementation. Having said that, we are confident that the team would be able to resolve the challenges very soon. With the addition of Reifen.com, we are looking at maximising on the new business vertical. We believe that there is a huge potential in further developing this business model across geographies.”