Nokia, Finland – Nokian Tyres has reported an ‘all-time high’ sales volume in the first quarter of 2021, helped largely by a significant recovery in the replacement tire market.
The Finnish tire maker saw operating profit rise nearly four-fold to €44.3 million, from €9 million reported in the first quarter of 2020.
Sales were up 22.1% at €341.8 million, despite a €10 million negative currency impact, Nokian reported 4 May.
“Demand for replacement tires has recovered rapidly since the end of 2020. In the first quarter, we reached an all-time high sales volume,” said Jukka Moisio, president and CEO.
In passenger car tires segment, volume growth was particularly strong in Russia as Nokian gained market share especially in summer tires.
However, a weak Russian ruble together with the higher share of Russian volume had a significant negative impact on the average sales price, Moisio said.
The segment reported a 104% increase in operating profit at €52.8 million, on 29% higher sales of €246 million. Here, Nokian said higher volumes had a €35-million impact on operating profit.
Nokian's Heavy Tyres segment also performed strongly, reaching an all-time high quarterly net sales of €57.1 million and segment operating profit of €12.6 million.
The higher sales, Nokian said, were driven by new product launches and customers' strong production levels.
Demand was particularly strong for agricultural, mining and truck tires, Nokian added.
According to Moisio, to meet the rising demand, Nokian has been operating its factory in Vsevolozhsk, Russia, at full capacity and ramping up production in Dayton, US, to 1 million units in 2021.
For the full year, Nokian said it expects net sales and segments operating profit to grow significantly, but did not offer further details.
While the global car and tire demand is expected to pick up, the Finnish tire maker warned that the Covid-19 pandemic continues to cause uncertainties for the development.
In addition, the company anticipates raw material costs to increase significantly in the second half of the year compared to 2020.