Apollo sales surge by 63 percent on Vredestein buy

ERJ staff report (DS)

Gurgaon, India -- Operating profits and sales have surged at Apollo Tyres for the 12 months to March 2010. The company reported operating profit at Rs 11.9 billion (Euro 208 million) from Rs 4.4 billion, while net sales surged by 63 percent to Rs 81.2 billion (Euro 1419 million) from Rs 49.8 billion.

Sales from the Netherlands-based Vredestein contributed 24 percent of consolidated sales. Vredestein was acquired in May 2009, so it contributed only 10 full months of sales to the annual figures.

For the stand-alone Indian market, net sales moved up by 24 percent to Rs 50.3 billion from Rs 40.7 billion. The sharpest growth within India was in the passenger car segment which saw 36 percent growth over the previous year. This is expected to grow even faster in the current year with the Chennai plant going into full production.

On a consolidated level, in terms of revenues across customer segments Apollo said 83 percent of revenues came from replacement tyres while the remainding 17 percent came from OE contracts.

On a consolidated level, in terms of revenue from product segments Apollo said passenger car sales generated 33 percent of revenues, truck-bus 47 percent, light truck 9 percent; farm & off-the-road 9 percent, with other segments contributing the remaining 2 perecnt.

Commenting on the results, Onkar S Kanwar, Chairman, Apollo Tyres Ltd, said, “This is an impressive performance by the company. While India has led from the front, each of our operations has ensured a comeback after a hard year. As I see it, while the overall demand scenario will continue to play a positive role in the growth of the tyre industry, the unsubstantiated rise in natural rubber prices of over 150 percent in just 14 months is going to be a dampener and a huge challenge. Also for cross-continent operations like ours currency volatility could play a critical role, especially a weaker Euro.”

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Press release from Apollo