General Tyres racks up profit of Rs328m

Earnings up 30% during Oct-Dec, result above expectations

KARACHI: General Tyres & Rubbers Limited (GTYR) on Thursday posted a profit of Rs328 million in the second quarter ended December 31, up 30% from Rs253 million in the same period of the previous year, according to a company notice sent to the Pakistan Stock Exchange (PSX).

Earnings per share (EPS) increased to Rs5.49 compared to an EPS of Rs4.24 in the period under review.

This takes the total six-month (Jul-Dec) earnings in 2016-17 to Rs563 million (EPS of Rs9.42) compared with a profit of Rs433 million or an EPS of Rs7.25 during the July-December period of the previous year.

The company’s share price closed at Rs286.50, up 0.78% on Thursday while the KSE-100 index closed at 49,665, up 210 points or 0.42%.

Revenues of GTYR posted a strong growth of 12.1% year-on-year and 15.4% quarter-on-quarter during the second quarter of 2016-17 mainly due to strong improvement in Original Equipment Manufacturers (OEMs) volumetric sales especially in the Heavy Commercial Vehicles (HCV) segment.

According to a JS Research report, the announcement outperformed expectations of an EPS of Rs4.42 for the quarter mainly due to better than anticipated margins.

Despite strong gross margin of 27% recorded for the quarter, threat to margin during in the third quarter of 2016-17 cannot be ruled out.

The report added that the company may increase prices of various tyre variants to pass on the impact of recent increase in rubber prices.

Published in The Express Tribune, February 3^rd, 2017.

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