Fri October 31 08:00 am 2014 in category Stock exchange releases
Nokian Tyres plc Interim Report 31 October 2014, 8 a.m.
Nokian Tyres plc Interim Report January-September 2014:
Economic situation in Russia and CIS impacts results - performance in western markets improved
Nokian Tyres Group’s Net sales decreased by 8.2% to EUR 327.7 million (EUR 357.0 million in 7-9/2013). Operating profit was down by 24.6% to EUR 72.1 million (95.7). Operating profit percentage was 22.0% (26.8%). Profit for the period decreased by 24.6% amounting to EUR 53.4 million (70.9). Earnings per share were down by 24.1% to EUR 0.40 (EUR 0.53).
Nokian Tyres Group’s Net sales decreased by 9.0% to EUR 1,009.2 million (EUR 1,109.1 million in 1-9/2013). Currency rate changes cut Net sales by EUR 60.0 million compared with the rates in the corresponding period in 2013. Operating profit was down by 20.9% to EUR 231.2 million (292.2). Operating profit percentage was 22.9% (26.3%). Profit for the period decreased by 28.1% amounting to EUR 158.3 million (220.1). Earnings per share were down by 28.5% to EUR 1.19 (EUR 1.66).
Financial guidance (updated)
In 2014, Net sales and Operating profit are to decline compared to 2013. Operating profit is estimated to be approximately EUR 300-320 million.
Previous guidance from 8 Aug 2014
In 2014, Net sales and Operating profit are to decline compared to 2013.
Ari Lehtoranta, President and CEO:
“We have been fighting this year to compensate the negative impacts from the effects of the Russia-Ukraine crisis; currencies in Russia and CIS weakened clearly against the Euro, and the purchasing power started to fall. This made consumers buy less and cheaper products. These factors resulted in a clearly weakened ASP for Nokian Tyres. Our team in Nokian Tyres has provided solid results in this turbulent business environment. We reached the same sales volume as in the first nine months of 2013, and when excluding Russia and CIS, our profitability has improved. We will make a strong Cash flow in full year 2014.
Currency rate changes cut our Net sales directly by EUR 60 million, which was one factor to cause our profitability to drop by 3.4 percentage points. Thanks to the declining raw material cost, improved productivity and running a tight ship, our profitability remained on a good 23% EBIT level.
The mid-term visibility is poor at the moment, but we are in a good position to pursue future success. The company has a strong balance sheet and an efficient industrial structure with potential to grow. The continuous success of our product line in the European tyre tests is expected to reward us in coming years. Our distribution is expanding with a good pace; the current number of Vianor stores is 1,302 and the NAD network has already grown to 773 stores. We are targeting to maintain our tradition of improving our market position in our core markets, both in good and in bad times. Despite the current turmoil, in the Russian economy in particular, Nokian Tyres continues to be a profitable, growth-seeking company.”
Read the whole stock exchange release here.