The quarter one results released by Nokian Tyres on May 6 show the group’s net sales to have increased 57.3% to 289.2 million euros in the three months to March 31, and profit up 211.1% year-on-year to 62.4 million euros.
For the rest of 2011, the Finnish tiremaker anticipates operating profit, which during the first quarter jumped 241.8% year-on-year to 183.8 million euros, will “improve clearly” compared with 2010; this may be helped by a 30% increase production capacity during the year, largely in its Russian plant. The challenge posed by raw material costs remains, however, and Nokian anticipates these will this year be 30% higher than in 2010. To counter this, Nokian is preparing for “further tire price increases during 2011.”
“Continued clear improvement of demand in core business gave Nokian Tyres a flying start for 2011,” said company president and CEO Kim Gran. “The first quarter was a success for us, as we beat all former Q1 results. Sales grew significantly in our core markets – Northern Europe and Russia – trailing the economic growth, booming new car sales and improved consumer confidence. We continue to win market share with new test winning products and the expansion of distribution network spearheaded by Vianor. A larger share of Russian sales, with sales mix weighting more clearly on premium tires combined with price increases were sufficient to compensate for the significantly increasing raw material cost.”
Sales of passenger car tires rose 65% during the quarter and accounted for 74% of the group’s total sales, up from 68.1% in the first quarter of 2010. Winter tire sales represented 49% of these sales, roughly the same as in the corresponding period a year earlier. The lion’s share of sales growth was witnessed in Russia, where winter tire sales “improved clearly” and summer tire sales doubled year-on-year.
Heavy tire sales increased 68.7% year-on-year and were 9.1% of total sales, a growth of 0.9% compared with a year earlier. Strongest sales growth was seen in forestry, mining and radial tires. Sales through the Vianor retail network decreased 0.6% year-on-year and formed 13.5% of the group total, as opposed to 20.7% in the first quarter of last year. Sales of other operations were up 73.9% and represented 3.4% of total sales, up from 3% a year earlier. (Tyres & Accessories)
