Nokia, Finland – Nokian Tyres plc has reported double-digit declines in both sales and profits for the first quarter of 2020, due mainly to Covid-19 pandemic and lower volumes in Russia.
Operating profit fell 71% to €16.3 million during the first three months of the year on 16.5% lower sales of €280 million, Nokian announced 5 May.
The Finnish tire maker linked lower sales to measures taken to reduce its high carry-over stocks in Russia, low demand caused by Covid-19 and a mild winter in all main markets.
Earnings were hit by a €20-million negative impact from lower volumes in Russia, and a €10-million effect from Covid-19 and low factory utilisation rates.
Nokian withdrew its 2020 financial guidance in March amid uncertainties caused by Covid-19.
In its quarterly report the tire maker unveiled a number of financial measures taken to reduce its cost base to counter the negative impact of the pandemic on demand.
Among other moves, Nokian said it had reduced its capex by €200 million to €170 million for 2020 and that it was working to enhance liquidity through new financial facilities.
Going forward, Nokian’s president and CEO Hille Korhonen said she expected the second quarter of 2020 to be “severely impacted” by Covid-19.
The Nokian leader said it was difficult to predict the impact due to “limited visibility to customer and consumer behaviour,” but stressed that the company had a “solid foundation” to navigate through the difficult situation.