Ukraine crisis keeps brakes on Nokian

Nokia, Finland –  Economic difficulties in Russia and the CIS have continued to impact on Nokian Tyres plc, the Finnish group said in its interim report for the third quarter and first nine months of the year.

Despite some recovery elsewhere, third quarter net sales at Nokian fell 8.2 percent to €327.7 million and operating profit was down by 24.6 percent to €72.1 million.

The performance continued a trend from the start of 2014: net sales over the first three quarters decreasing 9.0 percent to €1,009.2 million – including a €60-million decline due to currency factors. Operating profit, meanwhile, fell 20.9 percent to €231.2 million.

“We have been fighting this year to compensate the negative impacts from the effects of the Russia-Ukraine crisis,” explained Ari Lehtoranta, president and CEO.

“Currencies in Russia and CIS weakened clearly against the Euro, and the purchasing power started to fall. This made consumers buy less and cheaper products. These factors resulted in a clearly weakened ASP for Nokian Tyres,” he added.

On the plus side, Lehtoranta said Nokian had reached the same sales volume as in the first nine months of 2013 and, excluding Russia and CIS, its profitability had improved. He also forecast a strong cash flow in full year 2014.

“Thanks to the declining raw material cost, improved productivity and running a tight ship, our profitability remained on a good 23% EBIT level, the Nokian boss also commented.