Tyremaker Goodyear India posts Q3 profit fall on lower farm demand
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Tyremaker Goodyear India reported its first quarterly profit drop in five quarters on Friday, hurt by subdued demand in its farm segment.
The Indian unit of U.S.-based Goodyear Tire said its standalone profit fell 10.5% to 218.6 million rupees ($2.6 million) in the third quarter.
Revenue from operations fell 14.2% to 5.91 billion rupees, declining for the third quarter in a row.
"We witnessed a significantly weak quarter in the farm segment with the tractor industry recording substantial year-over-year degrowth," Sandeep Mahajan, chairman and managing director, said in a statement.
Even though the cost of materials, which accounts for the majority of total expenses, fell 8.8% in the quarter, it could not help lift the bottom line. Total expenses declined 14% to 5.66 billion rupees.
But, the company said its cost management and improving product range partially offset the impact of higher raw material costs and lower volumes.
Analysts have also noted that tyremakers are grappling with rising costs of raw materials such as rubber as well as carbon black, which is used as a colorant.
Last month, rival CEAT posted a bigger-than-expected rise in profit as price hikes made up for an increase in raw material costs and a slow recovery in sales growth.
Apollo and MRF are yet to report their financial results for the quarter.
Goodyear's shares closed up 0.5% ahead of the results. They have risen about 18.4% in the past year, while MRF, Apollo and CEAT have risen between 40% and 48%.
($1 = 82.8850 Indian rupees)
