Apollo Tyres (APOLLOTYRE) Q4 02/03 earnings summary

Executive summary

• FY ended Mar. 31, 2003 sales from operations reached a record Rs. 2,025.62 crore, up 18.45% YoY; net profit was Rs. 120.02 crore.

• Tyre and tube production rose 19.18% to 1.74 lakh tonnes, supported by productivity gains and more efficient machine use.

Financial highlights

• Sales from operations were Rs. 2,025.62 crore vs. Rs. 1,710.14 crore; sales and other income totaled Rs. 2,027.01 crore vs. Rs. 1,712.75 crore.

• Operating profit before interest and depreciation was Rs. 209.30 crore vs. Rs. 141.22 crore; net profit rose to Rs. 120.02 crore from Rs. 36.81 crore.

• Adjusted for exceptional items, profit after tax was Rs. 103.40 crore vs. Rs. 36.81 crore; exceptional items netted a Rs. 16.62 crore gain.

• Raw material consumption increased to Rs. 917.99 crore from Rs. 753.70 crore; interest expense fell to Rs. 26.03 crore from Rs. 54.14 crore.

Outlook and guidance

• All-steel truck radial facility at Limda was under construction; first tyres targeted for April 2004, using technology aligned with Continental AG facilities in Europe and the U.S.

• Passenger-car and LCV radial capacity expansion was planned; Perambra capacity had risen from 147 to 200 tonnes/day, with expansion completed in March 2003.

• Strategy emphasized cost optimization, stronger market coverage and customer focus; management cautioned that firmer natural-rubber prices could pressure margins.