Apollo Tyres (APOLLOTYRE) Q4 03/04 earnings summary

Executive summary

• FY04 sales from operations rose 14.25% to Rs. 2,314.31 crore; net profit fell to Rs. 70.42 crore from Rs. 120.02 crore.

• Tyre and tube production increased 16.66% to 2.03 lakh tonnes; installed capacity reached 532 MT/day from 465 MT/day.

• Growth and capacity expansion were supported by a Michelin alliance, while higher input costs weighed on operating profit.

Financial highlights

• Sales and other income were Rs. 2,320.34 crore vs Rs. 2,027.01 crore; operating sales were Rs. 2,314.31 crore vs Rs. 2,025.62 crore.

• Operating profit before interest and depreciation was Rs. 167.58 crore vs Rs. 208.13 crore; profit before tax and exceptional items was Rs. 105.23 crore vs Rs. 149.91 crore.

• PAT before exceptional items was Rs. 70.42 crore vs Rs. 103.40 crore; reported FY03 net profit of Rs. 120.02 crore included a net Rs. 16.62 crore exceptional gain.

• Raw-material consumption rose to Rs. 1,193.16 crore from Rs. 917.99 crore; interest expense declined to Rs. 18.63 crore from Rs. 24.86 crore.

Outlook and guidance

• Commercial vehicle volumes were expected to grow 15–20%; improved roads and rising vehicle population were cited as demand drivers.

• Passenger-car radial capacity at Limda rose from 2,200 to 6,600 tyres/day and light-truck radial capacity from 270 to 540/day; production ramp-up was underway.

• Passenger-car radial growth, SUV and LCV radial products, farm tyres, fuel efficiency, durability and cost optimization were R&D priorities.