Nokian sales, profits jumped in Q1
ERJ staff report (DS)
Helsinki, Finland -- Sales and profits rose strongly for Nokian Tyres PLC in the three months to March 2008. The Group's net sales were up by 23.2 percent to EUR 246.3 million, from EUR 199.9 million in Jan-March 2007. Operating profit rose to EUR 54.4 million from EUR 39.0 million a year earlier.
Kim Gran, President and CEO said, "“The first quarter gave a flying start for 2008: sales increased strongly in the company's core markets, and operating profit saw a clear improvement over the previous year. The majority of growth in sales came from Russia and other CIS countries. Both sales of summer tyres and pre-sales of winter tyres were brisk. The average price of tyres rose as a result of a good sales mix, successfully implemented price increases and new products."
Raw material prices in manufacturing increased by 3.5% in the first quarter compared to the corresponding period a year earlier.At EUR 73.4 million (EUR 62.3 million), fixed costs accounted for 29.8% (31.2%) of net sales.
Nokian said sales in Russia and the CIS countries increased by 64.0% compared to previous year, and market shares improved. The distribution network was expanded by signing distribution agreements and through growth of the Vianor network. Much of the increase in sales was due to the ramp-up of local production. Nokian said "The four production lines of the Russian plant operate continuously in three shifts, and the plant's production volume and quality level are on target."
An extension of 32,500 square metres has been built adjacent to the existing plant, which currently has a capacity of four million tyres. Installation of production machinery has proceeded according to plan, and parts of the new production lines are already in operation. During 2008, production capacity will be gradually increased with three new production lines. Also extension work on the mixing department and the housing project “Hakkapeliitta Village†for the personnel has commenced.
On 19 October 2007, Nokian Tyres announced it had signed an agreement with the Kazakhstanian multi-industrial company Ordabasy Corporation JSC to build a green-field passenger car tyre factory in Kazakhstan. Nokian Tyres has a 10% stake in the joint venture, with the option to increase its ownership to a minimum of 50%.
Plant start-up is scheduled for 2009. The total investment will be approximately EUR 160 million, financed through equity of approximately EUR 40 million and external loans. Nokian Tyres has signed a long-term technical support and management aid agreement with Ordabasy Corporation.
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Press release from Nokian
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