Nokian reports ‘good performance’ in volatile market environment

Nokia, Finland – Nokian Tyres plc has seen an uptick in third quarter results as demand and customer confidence improved during the three months to end of September.

Sales for the three months were down 1.3% year-on-year at €350 million, but at comparable currency rates net sales increased by 3.3%, said Nokian in a 27 Oct statement. 

The group’s operating profit was down 7.4% at €69.3 million in third quarter, as the Finnish tire maker reduced carryover stocks in Russia and currency exchange rates impacted sales negatively. 

For the first nine months of the year, sales fell 18.9% to €900 million, due to mainly to Covid-19, Russian stock adjustments and mild winter in all main markets.

During the period, segments operating profit was more than halved to €110.1 million, driven by lower volumes and 'underabsorption' of factory costs. 

Nokian linked the third quarter improvement in sales to a “strong performance in North America, Central Europe and also in, in the Nordics.”

“Passenger car tire growth was driven by North America, Central Europe and we had a relatively good performance in all business units in this volatile environment,” said CEO Jukka Moisio during a conference call on the same day. 

In Russia, net sales declined because of the measures taken to reduce the carryover stocks in the distribution channels.

Breaking down segment performance, Nokian passenger car tire division reported a 0.7% decline in sales at €255 million. At constant currency rates, sales were up 4.8%, Nokian said.

Sales of heavy tires fell 4.5% to €49.8 million, while the distribution arm Vianor reported a 3.3% decline in sales to €67.4 million.

“But in summary we can say that Q3 was good. We are pleased about that and it was better than we expected when we went into the quarter,” the company chief said. 

In the fourth quarter, Moisio said, Nokian will continue its focus on cost, and cash flow and will “make of course most of the [winter] season.”