Nokian Tyres reports higher sales, profits in first half

ERJ staff report (DS)

Helsinki, Finland -- Nokian Tyres Group's net sales in the first half of 2008 totalled Euro 530.3 million (Euro 432.5 million), signifying a 22.6 percent year-over-year increase. Sales increased in the Nordic countries by 8.4 percent, in Russia and the other CIS countries by 53.7 percent and in the USA by 39.1 percent from the previous year. Sales in Eastern Europe were down 1.9% percent.

Kim Gran, President and CEO said, "“Nokian Tyres sales continued to grow steeply, and operating profit improved clearly in the second quarter and the whole review period. Most of the growth came from the pre-sales of winter tyres for passenger cars in Russia and the other CIS countries." He added, "The outlook for 2008 is good, and we expect strong growth to continue in our key markets."

Nokian said the overall Western European tyre markets declined, while Nordic tyre markets grew slightly, and the replacement market for passenger car tyres grew in Russia and the other CIS countries.

Nokian said raw material prices increased by 6% year-over-year in the first half. Fixed costs amounted to Euro 148.3 million (Euro 129.6 million), accounting for 28.0 percent (30.0 percent) of net sales. The average tyre prices rose as a result of an improved sales mix, new products and successfully implemented price increases, said the company.

Nokian said it increased production at its Russian factory, in line with its plans, but this had not been enough to meet demand. "sales had to be restricted to Central and Eastern European countries." said Nokian. The company added that the Russian plant increased to six lines, which operate continuously in three shifts. The plant's production volume and quality level are on target. The capacity expansion has proceeded as planned and the new production lines will be fully operational in the beginning of the third quarter of the year. The seventh production line will be installed during 2008.

The company said Sales in Russia and the CIS countries increased by 53.7 percent year-over-year during the period under review, and market shares improved. The distribution network was extended by signing distribution agreements and through Vianor's activities.

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Press release from Nokian