Central Europe slowdown impact Nokian results

Nokia, Finland – Nokian Tyres plc has reported a 12.5% year-on-year decline in first half operating profit at €148 million, on 0.3% lower sales of €763 million.

The Finnish tire maker linked the decline in sales to weak car and tire sectors in Europe, which offset gains in the heavy tire segment during the first six months of the year.

“The competitive landscape in the Central European replacement car tire market is tight due to weakness in the OE segment, as there is a high supply of tires in the market,” said Hille Korhonen, president and CEO 6 Aug.

Nokian, she went on to say, expects short-term weakness in sales volume growth in Central Europe to continue for the rest of the year.

Operating profit was also negatively affected by currency impact, especially during the first quarter, coming mainly from Russian ruble.

Other factors contributing to the decline included higher material costs, production costs due to ramp-up of Dayton tire factory, and higher share of production in the first quarter in Finland.