Goodyear's India unit almost doubles Q4 profit to 336 million rupees on easing costs

TYRE manufacturer Goodyear India on Monday (May 29) reported a near twofold rise in fourth-quarter profit, helped by lower raw material costs and growing demand for automobiles in the country.

The company’s standalone profit rose to 336.1 million rupees (S$5.5 million) for the quarter ended Mar 31, from 173.9 million rupees a year ago, it said in an exchange filing.

Revenue from operations rose 9.1 per cent to 6.53 billion rupees, while cost of materials consumed fell 5.4 per cent, the Indian unit of Goodyear Tire and Rubber Co said.

Indian automakers recorded higher sales in the March quarter as consumers snapped up vehicles ahead of price increases due to implementation of tighter fuel emission norms, which also boosted demand for tyre makers.

Additionally, rubber prices have softened 3 per cent from the December quarter, and the easing prices were reflected in the company’s bottom line.

Goodyear’s parent company, however, posted a loss of US$101 million during the quarter, with revenue up by a marginal 0.7 per cent.

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“The growth is driven by better demand in (the) original equipment segment. Decrease in raw material costs, coupled with cost efficiencies, drove higher profitability in the quarter,” said Sandeep Mahajan, chairman and managing director of Goodyear India.

The company’s total expenses grew 5.4 per cent to 6.10 billion rupees.

Goodyear’s results were largely in line with larger peers JK Tyre, Apollo Tyres and MRF whose profits rose between two- and four-fold in the quarter.

Additionally, the company recommended a final dividend of 26.5 rupees per share for the financial year ended Mar 31.

Shares of the company rose 1.82 per cent at 1,280 rupees after the results. REUTERS