Apollo Tyres Ltd has reported a 66 per cent drop in profit for the financial year ended March 31, 2001. The company made a net profit of Rs 25.42 crore for 2000-01 as against Rs 76.06 crore for 1999-2000.
However, it recorded an 8 per cent rise in turnover for the year at Rs 1,454.70 crore as against Rs 1,348.75 during the previous year.
The operating profit, at Rs 113.83 crore, too was short of last year's Rs 162 crore. The company's audited accounts were adopted by its board of directors here today.
The board recommended a dividend of 40 per cent for the year amounting to a payout of Rs 14.53 crore.
In view of the lower price realisation -- a consequence of the sluggishness in the automobile sector --, increase in prices of raw materials, higher interest burden and a drop in other income (Rs 4 crore compared with Rs 20 crore for the previous year), the margins of the company came under pressure, according to a company release.
A sharp fall in sales in the automobile sector, spanning medium and heavy commercial vehicles, two-wheelers and tractors, and the stagnation in the sale of passenger cars during the year led to a poor offtake in the industry during the year.
"The period also witnessed the rupee plummeting to one of the lowest levels against the dollar. The weakening rupee pushed up the cost of imported raw materials substantially," the release added.
The company has attributed the lower profits to the increase in the cost of petro-products by about 12 per cent during the year.
"The increase in the prices of petro products is significant since 60 per cent of the raw material used in tyres is petro-based," it said.
For the current financial year, the company is adopting special measures for tighter current asset management, inventory control, working capital management and human resources management for effective cost management.
