Nokian issues profit warning

Nokian Tyres’ management has issued a profit warning stating that second half revenues are likely to be lower than expected. Third quarter sales are said to be stable year-on-year, which are somewhat lower than some analysts’ projections (Deutsche Bank for example had said +10 per cent).

Writing in an investors’ note dated 7 October, Deutsche Bank also pointed out that Nokian now says that operating profit will be “slightly up” compared with its own estimates of + 16 per cent.

And, apparently due to a weak demand in Russia, Nokian’s management is now guiding for lower second half revenues and lower EBIT year-on-year despite coming from a low base (second half 2012 EBIT was already down 8 per cent year-on-year).

As far as the reason for the profit warning is concerned, according to Deutsche Bank, it is partly due to a weaker volume environment and partly to the devaluation of the ruble (14 million euros on EBIT), despite a raw material tailwind of 25 million euros.