Nokian's Q2 figures beat all forecasts

ERJ staff report (DS)

Nokia, Finland -- In common with other tyre makers, Nokian group reported stronger sales and a substantial recovery in profits on the back of much stronger demand in the tyre industry in the first half of the year.

In the six months to June 2010, the company reported sales of euro 444.2 million, up by 36.2 percent over the euro 346.7 million reported a year previously. Operating profits more than quadrupled, to euro 82 million (from euro 17.5 million). Margins returned to a healthy 16.3 percent.

The company also raised its expectations for the full year.

Nokian said demand and sales grew in all profit centres. it saw strong summer tyre sales and strong pre-season deliveries of winter tyres. The company now has low inventories and a strong order book going forward.

The company expects to increase capacity at its Russian plant when it brings onstream its 8th production line in the third quarter this year. This wil further increase the overall fraction of tyres produced in low-cost zones, helping to improve the company's cost structure.

Tyhe comapny said raw material prices in the period had been low, but forecasts that raw materials will affect full-year profits. The comapny runs an index of prices and says the index is at 167 in the second half of the year, compared with 127 in the first half. It is based on 100 in the year 2000.

Nokian said its saw materials bill is split between NR (26 percent), SR (28 percent), cords and beads (20 percent), chemicals (13 percent) and fillers (13 percent).

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Press release from Nokian

Presentation (much more interesting) from Nokian