Sales of ‘heavy’ tires, said the Nokian boss, were slightly higher than last year, but profitability declined due to the higher share of truck tires and the timing of some marketing activities.
On a more positive note, Lehtoranta noted productivity gains both in heavy tires and passenger car tires, while production volumes were higher than last year.
“The decline of raw material costs continued, and our lower production costs supported profitability. The development of ASP continued to be negative but, aside from the unfavourable currency impact, both price and mix changes were positive,” said the Nokian boss.
But while profitability remained at a good level Lehtoranta said Nokian had to book an additional €6.3 million of bad debt provisions for “problematic cases” in Russia. This took the operating profit below last year’s level by -3.8%
Difficulties continued in the Russian market, where sales declined by almost 30 percent, and a mild winter left inventories on the shelves in Russia and North America.
“We continued to grow summer tire sales, and even though debt collection has become more problematic in Russia, we ended up very close to last year’s sales and profitability,” said Lehtoranta.
Nokian’s chief concluded by pointing to market-share gains by the company in Central Europe, its investment in growth markets, an expanding distribution channel and ongoing investments in productivity.
These developments, he said, would “give Nokian Tyres opportunities to strengthen its position and to provide healthy margins and a strong cash flow also in the future.”