Half Year Loss Reported By Nokian Tyres
Nokian Tyres has released its financial results for the half year up to the end of June 2000. Figures shown in brackets are for the corresponding period last year. Net sales rose by 25.
4% to 152.2 m Euro (121.4 m).
Excluding the effects of acquisitions, sales were 132.6 m Euro, or 9.2% higher than last year.
The company made an operating loss of -1.5 m Euro (+ 5 m) and the net loss was -4.1 m Euro (+1.
6 m). A contributory factor was the high cost of raw materials (rubber, oil, carbon black); up 8% over last year’s prices. By the end of the year, Nokian expects this figure to have risen to 12%.
Below are details of individual product groups: Passenger Car Tyres Sales rose by 7.3% to reach 68 m Euro (63.3 m) despite low demand in the first quarter.
Summer tyres sold well in Germany, Russia and Eastern Europe, boosted in Germany by the introduction of new products and a consumer advertising campaign. Looking ahead, Nokian is pleased at advance orders for its new winter car and van tyres. During the year 2000, new products will account for almost 50% of sales.
Heavy Tyres Sales increased by 1.6% to 27.1 m Euro (26.
7 m), which was less than targeted. Agricultural tyre sales were affected by problems with an off-take manufacturing partner and Nokian itself began manufacturing the six most popular sizes of radial tyres. New radial tyres have been introduced into the range and accounted for 14% of heavy tyre sales.
The aim for this year is to increase this to 20%. Bicycle Tyres Sales were down 12.3% at 3.
2 m Euro (3.6 m). New products are scheduled to account for 30% of sales this year.
Retreading Materials These amounted to 4.1 m Euro, 4% higher than last year (3.9 m).
Demand for passenger car tyre retreading materials fell, but the truck tyre retreading sector showed an increase. Tyre Trade The Nokian tyre chain achieved net sales of 62.2 m Euro (29.
1 m); an increase of 114%. Taking out the effect of acquisitions (ISKO and Rengasmestarit-Kumi-Helenius Group) gives a comparative turnover figure of 32.9 m Euro.
Nokian says that sales were affected by severe price competition but the company is expecting the tyre chain to turn in good profits in the last quarter. Over the six months, Nokian invested 35.4 m Euro (22.
7 m) and intends to invest 60 m Euro over the year. 33 m Euro of this will be in the expansion of the mixing department and the expansion programme is part of a strategy designed to increase annual production by 50%. Looking ahead, Nokian is upbeat and expecting a better performance in the second half of the year and the company has restated its target for the year as being a 20% increase in both turnover and profit.
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