Nokian nine-month results show huge growth

ERJ staff report (DS)

Helsinki, Finland -- Nokian Tyres reported sales up by 41 percent and operating profit up by 100 percent in the nine months to 30 Sept 2011. The company expects sales in the coming Winter season to add further to the strong growth seen in the first nine months.

The company said, "Low inventories in distribution combined with improved car sales and a clear growth in winter tyre sales in Europe and Russia/CIS offer further growth potential. " It added, "Heavy tyre demand is healthy for 2011 but the growth in order intake is levelling off."

In the first nine months, Nokian Tyres Group recorded net sales of EUR 974.3 million (689.4), showing an increase of 41.3 percent on the corresponding period a year earlier. Sales in Russia nearly doubled and now represent 29 percent of group sales, up from 21 percent a year ago. Nokian Tyres Group recorded net sales of EUR 974.3 million (689.4), showing an increase of 41.3 percent on the corresponding period a year earlier.

In the three months to 30 Sept, Nokian recorded net sales of EUR 346.3 million (up from 245.2 million a year earlier), showing an increase of 41.2 percent on the corresponding period a year earlier. Operating profit almost doubled to EUR 95.4 million (from euro 48.3 million).

NOkian said it improved its sales of high-profit products. This, together with price increases raised the Average Selling Price year-over-year, thus compensating for the raw material cost increase of 30.7 percent versus the corresponding period a year earlier.

Production output (pcs) grew by 47 percent compared with the corresponding period a year earlier, boosted by the increased capacity in Russia.

The company has begun work on a new passenger car tyre factory adjacent to the existing plant in Russia. The new plant is estimated to commence production with two additional production lines during 2012 and further capacity increase by two lines taking place during 2013-2014

In the heavy tyre sector, NOkian said it is operating at full capacity and output (in tonnes) was up by 40 percent over last year. The company said it has bought new equipment to add around 20 percent to its heavy tyres capacity, which was being installed from the third quarter of 2011.

A new product category, Beyond All-Steel Radial (BAS) developed by Nokian Tyres was launched targeting harbour and mining end use applications. Sales were started challenging traditional all-steel tyres.

Nokian Tyres' sales in Russia increased year-over-year by 93.9 percent to EUR 274.3 million (141.4). Sales in CIS countries (excluding Russia) were EUR 27.4 million (13.4). Consolidated sales in Russia and CIS increased by 94.9 percent to EUR 301.7 million (154.8).

New car sales in Russia, the main driver for premium tyres, increased by 45 percent in 1-9/2011 compared to 1-9/2010. The new car sales was supported by the credit rates offered by banks (including loans subsidized by car manufacturers) returning to pre-crisis values. New car sales, the main driver for premium tyres, increased by 45 percent in 1-9/2011 compared to 1-9/2010. The new car sales was supported by the credit rates offered by banks (including loans subsidized by car manufacturers) returning to pre-crisis values.

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Press release from Nokian