Turnover Up, Profits Down – Nokian’s First Quarter Figures

Finnish manufacturer Nokian Tyres has revealed its financial results for the first quarter of the year. The main figures are as follows, with the figures for the same period last year in brackets. Net sales were 67 million Euros (57 m); an increase of 18.

4%. Exports accounted for 70% of sales. Nokian made an operating loss of -4.

4 m Euros (2.7 m), despite a profit in the manufacturing sector of 2.9 m Euros (5.

8 m). The Nokian-owned retail chain made a loss of -6.0 m Euros (-2.

9 m). Profit before tax was -6.6 m Euros (1.

7 m). Looking at the various product sectors, the value of passenger car tyre sales rose 4% to 34 m Euros (32.8 m).

Sales were very good in Germany and Sweden. New products include H and V-rated summer tyres and four new winter tyres, introduced in January. Demand for heavy and forestry tyres was buoyant; some 3% up at 13.

2 m Euros (12.9 m). Fierce price competition reduced the volumes of truck tyre sales, while agricultural and industrial sales were affected by the ending of the off-take manufacturing agreement with Tofan.

Retreading materials sales were 2.1 m Euros (1.7 m); a 19% increase.

Demand rose for truck and bus retreading materials, but the market for car retread materials declined. Nokian’s retail chain sales were up a massive 139% to 22.4 m Euros (9.

4 m). Excluding acquisitions, the figure stood at 11 m Euros and the operating loss was -6 m Euros (-2.9 m).

After having puchased wholesaler and retailer ISKO at the end of last year, Nokian strengthened its tyre chain recently by purchasing the 31-outlet chain of Rengasmestarit-Kumi-Helenius for 8.3 m Euros, giving the company 153 outlets in Finland, Sweden, Norway, Estonia and Latvia. There are plans to expand the chain, particularly in Sweden.

Nokian’s brand policy is that tyres on sale will be split 50/50 between the Nokian brand and those of other manufacturers. Two thirds of Nokian’s net sales will continue to come from outside the company’s own tyre chain..