Nokian says first nine months were good but stocks remain high

ERJ staff report (DS)

Helsinki, Finland -- Nokian Tyres' net sales for the first nine months of 2008 were up 21.6 percent to EUR 813.2 million (EUR 668.6 million 1-9/2007). Operating profit jumped 40 percent to EUR 200.5 million (EUR 140.8 million). The company said it expects to report growth in sales and to outperform the previous year's results for the full year 2008.

However, the company is preparing for a significant downturn in the coming months. In a statement, the company said, "In Russia and the CIS countries, the economy and new car sales growth have slowed down considerably. In the Nordic countries, demand is expected to remain at last year's level. The winter tyre stocks of Central European tyre distributors are exceptionally high, and manufacture in the automobile and tyre industry has been restricted from the summer onwards. The manufacture of industrial machinery and equipment is expected to continue to decrease."

Nethertheless, Nokian expects it can switch production an sales to tyres where there is strong demand. it noted that in the face of low demand for forestry tyres, it has switched production from forestry tyres to harbour, mining, agricultural and industrial machinery tyres. These products, said Nokian, sold well, but their margins are lower compared to forestry tyres. The production capacity was in full use in the review period.

Nokian said it is continuing to expand capacity at its plant i Russia ans still the plant could not make enough tyres to satisfy demand. As a result, said Nokian, "sales in Central European countries had to be restricted."

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Press release from Nokian