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Gajah Tunggal Q1 profits down

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JAKARTA, Indonesia (May 15, 2014) — Indonesian tire maker Gajah Tunggal Tbk. suffered a 25-percent drop in pre-tax operating income for the quarter ended March 31 despite 5.3-percent higher sales.

Gajah Tunggal cited higher sales, marketing and transportation costs and the differential between costs, which are denominated in U.S. dollars, and revenue, which is primarily in Indonesian rupiah.

Sales grew to $272 million in the quarter, with export sales up nearly 30 percent over the first quarter of 2013, the company said. The operating earnings fell to $34 million, or 12.5 percent of sales.

Sales to the U.S. and Europe recovered on the strength of those market’s improving economies, Gajah Tunggal said. Another driver was further penetration into the car tire OE segment, where sales more than doubled year-on-year, including its first-ever supplies to Honda Motor for the seven-passenger Mobilio van sourced locally, according to the company,

Offsetting these gains to an extent was a wearker domestic replacement market, where volcanic eruptions and persistent wet weather hampered sales.

The company, 49.7-percent owned by Giti Tire Pte. Ltd., disclosed its GT Radial brand will be the official tire sponsor to the ASEAN Football Federation Suzuki Cup this year. The tournament attracts as many as 120 million television viewers, Gajah Tunggal said.

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TB Reader Poll

Previous | Published January 28, 2016

Titan International and the United Steelworkers union have petitioned the U.S. International Trade Commission and U.S. Department of Commerce seeking relief from OTR tire imports from China, India and Sri Lanka. What’s your opinion?

I wholeheartedly support their action – something needs to be done.
(36 votes)
I think it’s a bad idea that could inevitably tie the hands of domestic tire makers.
(10 votes)
I oppose any duties against tire importers—they only raise costs for distributors and make it harder to obtain inventory.
(19 votes)
I’m kind of on the fence and not sure what’s right, but need more information before deciding.
(11 votes)
I don’t really care whether or not relief is granted.
(2 votes)
Total votes: 78