Less sales, more profit for Apollo
Apollo Tyres Ltd. posted net income of 2.9 billion rupees on net sales of 28.3 billion rupees for the first quarter ended June 30, 2015. That compares to income of nearly 2.3 billion rupees on sales of 32.2 billion rupees for the same period last year.
Based on the exchange rate on June 30, 2015, Apollo recorded net income of $45.6 million on net sales of nearly $445 million for 1Q 2015-2016. The company’s income-to-sales ratio was 10.2%.
The company's operating income totaled 5.3 billion rupees ($83.1 million).
"In a slow-growth market across geographies, further marred by unregulated imports of tires in India, we have planned and invested to capitalise on the future opportunities," says Chairman Onkar S Kanwar. "This strategic planning will reduce our dependence on a particular market for growth and help us expand our global footprint."
"While the European Operations reported flat revenue growth in the quarter under consideration, the increasing imports of commercial vehicle tires into the country adversely impacted the Indian Operations’ revenue," according to Apollo. "More than 30% of the demand for truck-bus radials from the replacement market in India is being met by these imported tires, which are mostly from China."
Business in India accounts for 69.5% of Apollo's revenue and 81.8% of its profit.
Segment Revenue Profit/(Loss)
India $338.4 million $56.8 million
Europe $121.0 million $13.4 million
Others $27.6 million ($777,200)
At the 42nd annual General Meeting, shareholders approved the annual dividend payout of 200% per share (2 rupees per equity share), for the 2014-2015 fiscal year ended March 31, 2015.