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DRC - EURO 4 requirements slash DRC profits - Earnings Flash + AGM Note

Q1 2018 results. DRC’s Q1 2018 revenue and NPAT dropped 18.5% and 69.3%, respectively, vs Q1 2017. This was mainly driven by a drop in sales of light truck bias (LTB) tires (17.6% of DRC’s Q1 2017 revenue; 42.1% gross profit margin) following Document No. 436, which was enacted in late 2017. The document requires local auto manufacturers to meet EURO 4 standards, which means using light truck radial (LTR) tires instead of LTB tires that are only EURO 2 standard compliant.