“Car Tyres reported EBIT of 41.6 euros, 13% higher than we had assumed. The EBIT margin was hence 29.4%, the second highest quarterly margin ever beaten only by the third quarter of 2004, which is a seasonally more important quarter,” Deutsche bank reported in an analytical report.

Growth in Nokian’s Russian operations are said to have been a main reason for the record margins. Nokian’s St. Petersburg plant has generated significant cost efficiency improvements “on top of the very solid demand picture.”

As a result of the strong first quarter, second-half margins look set to beat the first quarter level. Networking capital stood at 400 million euros at end of the first quarter, up by 25% year-on-year, in line with growth of 12 month rolling net sales. “We have raised our 2007 and 2008 earnings per share estimates by some 6%-7% and our target to 27 euros from 26,” the analysts continued.