Apollo sees profit up 79% on 12% sales Increase for Q1

ERJ staff report (DS)

Gurgaon, India -- Apollo Tyres has reported much higher profits on a modest sales increase for the three months ended 30 June 2012.

Apollo Tyres Ltd's 1st quarter sales increased by 12 percent, compared to the same quarter last year, to close the quarter

at Rs 31.65 billion (Euro 464 million), while net profit grew by 79 percent to reach Rs 1.38 billion. The company said the increase in profitability was due to improved price/ customer mix as the company moves upmarket.

In India, Apollo said it has established a clear leadership in the

growing truck-bus radial tyres, registering a growth of 60 percent in the quarter; while in South Africa passenger vehicle

tyre sales moved higher by 32 percent. European Operations, even in a slowdown situation continued to maintain

topline growth and profitability expanded by close to 50 percent.

Commenting on the results, Onkar S Kanwar, Chairman, Apollo Tyres Ltd said, “For the past few quarters, we

have been focusing on improving our product and customer mix across geographies. This has enabled us to post

incremental revenue increases on a sequential basis in each of the quarters last year, eventually resulting in

enhanced profitability in the 1st quarter of this year.

An Apollo spokesman confirmed local press reports saying Apollo plans to invest Rs 3000 million (euro 44 million) over the next two years in its unit in Kalamassery, Kerala to develop it into a global scale unit to make 'industrial tyres' for export to global destinations including Europe and North and South America. The spokesman said that industrial tyres means, “Off-Highway Tyres. This includes farm tyres, fork-lift tyres, dumpers, graders,”

The company is still seeking locations for a car tyre manufacturing facility in central Europe. Previously the company has said Poland is a potential lotion for this plant.

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Press release from Apollo Tyres