Indonesian tyre maker Gajah Tunggal Tbk. suffered a 25-percent drop in pre-tax operating income for the quarter ended March 31 despite 5.3-percent higher sales.
Gajah Tunggal cited higher sales, marketing and transportation costs and the differential between costs, which are denominated in US dollars, and revenue, which is primarily in Indonesian rupiah.
Sales grew to $272 million in the quarter, with export sales up nearly 30 percent over the first quarter of 2013, the company said. The operating earnings fell to $34 million, or 12.5 percent of sales.
Sales to the US and Europe recovered on the strength of those market’s improving economies, Gajah Tunggal said. Another driver was further penetration into the car tyre OE segment, where sales more than doubled year-on-year, including its first-ever supplies to Honda Motor for the seven-passenger Mobilio van sourced locally, according to the company,
Offsetting these gains to an extent was a wearker domestic replacement market, where volcanic eruptions and persistent wet weather hampered sales.
The company, 49.7-percent owned by Giti Tire Pte. Ltd., disclosed its GT Radial brand will be the official tyre sponsor to the ASEAN Football Federation Suzuki Cup this year. The tournament attracts as many as 120 million television viewers, Gajah Tunggal said.