JK Tyres sees profits fall on higher sales

ERJ staff report (DS)

New Delhi, India -- Sales at JK Tyre for the 12 months to 31 March 2011 increased 33 percent, but pre-tax profits fell by nearly half.

Consolidated net sales for the 12 months reached Rs 59 835 million (euro 939 million) from Rs 45 847 million. Profit before tax, interest and exceptionals fell to Rs 2131 million (euro 33.4 million) from Rs 4165 million a year earlier.

Raw materials costs jumped to Rs 43 857 million from Rs 27 230 million in the period. JK said it could not raise prices sufficiently to keep pace with this increase.

The company said it is the top producer in India of truck/bus radials, with output exceeding 4 million uinits. it also said the expansion projects are on schedule, including its greenfield factory at Chennai.

At the company's Mexican unit (previously the Tornel operations) sales increased some 20 percent to Rs 11 345 million, but profits fell even more sharply than in India, to Rs 278.3 million (from Rs 831 million).

Local press reports said the company was, "seriously studying" the possibility of buying natural rubber plantations in order to secure supply and has budgeted Rs 9600 million (euro 150 million) for the project.

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Results statement from JK Tyre

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Headline

Source (India)