Materials prices dent earnings-growth at Apollo

Gurgaon, India – Raw-materials costs put the brakes on earnings-growth at Apollo Tyres Ltd in the third quarter; but management remains upbeat about full-year prospects.

For the final three months of 2018, Apollo posted a 3% year-on-year rise in earnings (EBITDA) to €68.2 million, on consolidated sales 16% higher at €566.6 million.

By contrast, for the nine months to 31 Dec, earnings grew 33% to €198.1 million, the Indian tire maker also reported 5 Feb.

Sales for the first three quarters of Apollo’s 2019 fiscal year (FY19) came to €566.64, 22.5% higher than in the prior-year period.

Apollo noted double-digit sales growth at its Indian and European operations, both in the third quarter and for the nine months of FY19.

Margins, though, were impacted by “the lag effect of the increase in raw material prices, especially crude-based ones, in the previous quarters.”

Raw material prices have since “eased to some extent,” the Apollo leader continued.

“In the current quarter, we are already witnessing an uptick in demand, and are hopeful of reporting a healthy growth,” said Kanwar.