Nokian raises earnings outlook as Q3 profit jumps 73%

Nokia, Finland – Nokian Tyres has raised its full-year profitability outlook following a 73% increase in third-quarter operating profit, supported by improved pricing and lower manufacturing and material costs.

The Finnish tire maker reported operating profit of €37.9 million for the three months to 30 Sept, up from €21.8 million a year earlier, as sales increased 4.4% year-on-year to €359 million.

Segments earnings (EBITDA) rose 22.2% year-on-year to €80 million from €65.4 million, Nokian reported 27 Oct.

Following the improved performance, Nokian now expects its full-year segments operating profit margin to be at the “higher end” of its 9–10% guidance range, compared with its previous forecast of 8–10%.

The company maintained its expectation for full-year sales growth, despite anticipating flat tire demand across its markets.

“Our strong performance continued in the third quarter... and year to date earnings per share turned positive for the first time since 2021,” said president and CEO Paolo Pompei.

“The improvement reflects our continued focus on value over volume, supported by a stronger pricing and product mix as well as successful efficiency actions across the organisation,” he added.

Passenger car tires segment led the improvement, with quarterly sales rising 5.6% to €247.1 million and operating profit increasing by over 50% to €43 million from €28.4 million.

The business achieved a segments operating profit margin of 20.5%, up from 16.6% a year earlier.

Heavy tires also reported improved results, with sales increasing 2.4% to €56.7 million and operating profit rising by 74% to €8.7 million.

“Despite challenging market conditions, heavy tires increased sales while significantly improving profitability,” Pompei said, adding that both tire businesses continued to improve manufacturing productivity and efficiency.

Meanwhile, Nokian's Vianor retail operations reported a 3% increase in sales to €77.2 million, but operating losses widened to €7 million from €6.4 million reported the year before.

For the first nine months, group sales increased 6.4% to just over €1 billion, while operating profit rose 77% to €55 million from €700,000 reported a year earlier.

Segments earnings, meanwhile, increased 38.5% to €187 million over the nine months, while segments operating profit more than doubled to €87.7 million.

Pompei said new premium products, including the Hakkapeliitta 01 and Snowproof 3P winter tires, alongside expansion into larger rim sizes, were supporting a “higher-value product mix”.

“With the multi-year investment phase now successfully completed, capital expenditure will be lower this year as we leverage our… manufacturing platform and global production footprint,” he added.