Apollo Tyres (APOLLOTYRE) Q4 04/05 earnings summary

Executive summary

• FY05 sales from operations reached a record Rs2,656.81 crore, up 14.8% YoY; production tonnage rose 10% to 224 lakh MT.

• Profitability held up amid steep input-cost inflation: operating profit before interest and depreciation rose to Rs184.64 crore, while net profit was Rs67.63 crore.

• Strategic focus centered on scaling passenger-car and light-truck radials, led by the Acelere launch and capacity expansion at Vadodara.

Financial highlights

• Sales and other income increased to Rs2,676.62 crore from Rs2,319.87 crore; sales from operations rose 14.8% to Rs2,656.81 crore.

• Operating profit before interest and depreciation rose to Rs184.64 crore from Rs167.58 crore; profit before tax and exceptional items fell to Rs84.91 crore from Rs105.23 crore.

• Net profit was Rs67.63 crore vs Rs70.42 crore; reported EPS was Rs17.64 vs Rs21.11.

• Raw-material consumption increased to Rs1,425.37 crore from Rs1,193.16 crore; interest expense rose to Rs42.94 crore from Rs18.63 crore.

Outlook and guidance

• Passenger-car radial capacity planned to reach 3 lakh units/month and light-truck radial capacity 0.5 lakh units/month at Vadodara.

• Further upstream capacity expansion planned at Vadodara and Kochi to 360 MT/day and 270 MT/day, respectively; debottlenecking and utilization improvements remain priorities.

• Plans include ultra-high-performance radial tyres and rapid expansion of passenger and light-truck radial production; light-truck radial output was expected to triple existing capacity.