KERALA, India — Apollo Tyres Ltd. suffered double-digit drops in operating and net income for the quarter and nine-month periods ended Dec. 31 even as revenue grew by 5%.
Operating profit fell 21.6% to $112.1 million on sales revenue of $820.3 million, cutting the operating ratio five points to 13.7%. Net earnings fell 32.1% to $39.9 million.
Apollo attributed the earnings decline in part in higher raw materials prices as well as "sluggish" original-equipment demand. Sales growth came from its Indian and European operations, which reported mid-single digit revenue growth.
"Under tough market conditions we have been able to perform well in the key passenger vehicle and commercial vehicle replacement segments in India," Apollo Tyres Chairman Onkar Kanwar said.
"This performance was somewhat negated by the sluggish OE segment. Europe too, has performed in line with the market. While the third quarter witnessed an increase in raw material prices, impacting our margins, we see a flattish trend in the current quarter."
Kerala-based Apollo Tyres suffered a 20% drop in operating profit for the April-December period to $440.8 million on 3% higher revenue of $2.33 billion, yielding a 17.4% operating ratio.
Net earnings plunged 31.5% to $110.9 million.
Apollo, considered 14th largest tire maker in the world according to Tire Business research, has multiple factories in India, and a plant each in the Netherlands and Hungary. The company sells Apollo- and Vredestein-branded tires in over 100 countries, including the U.S. through its Apollo Tires U.S. Inc. subsidiary, headquartered in Sandy Springs, Ga.
