Volumes fall but exchange rates support overall sales
Nokia, Finland – Nokian Tires plc continued to feel the impact of the war in Russia on its third quarter performance, despite positive currency effects in the three months to the end of September.
The Finnish manufacturer announced a 76% drop in its operating profit to 56 million euros, with a positive exchange rate effect of around 17 million euros.
In a Nov. 1 statement, Nokian linked lower profits to lower passenger car volumes and changing plant mix due to lower production in Russia.
Operating profit has been more than halved, from 90 million euros in 2021 to 41 million euros this year.
Sales for the period rose 5.1% to 466 million euros, Nokian said, noting that at comparable currencies, net sales fell 6.4% mainly due to lower volumes.
The manufacturer said its tire exports from Russia to Europe and North America ended in July, further impacting volumes.
Over the nine months to the end of September, operating income fell by nearly 14% to €208 million, mainly due to lower volumes and the change in plant mix and despite a positive foreign exchange effect of €30 million .
Sales for the first three quarters increased by 13.6% to 1.3 billion euros, as “the year started with good demand in all markets”.
“In the third quarter of 2022, we focused on the planning and the first steps to build the new Nokian Tires without Russia,” said Jukka Moisio, President and CEO.
“Today we are happy to announce that we will invest around 650 million euros in a completely new tire factory in Romania,” he added.
The investment, Moisio continued, is “vital” to create additional capacity and enable future growth, with commercial production expected to start in 2025.
“At the same time, we continued to increase the capacity of our factories in Finland and the United States,” said the boss of Nokian.
Nokian initiated a controlled exit from Russia in June and announced in October that it was selling its Vsevolozhsk production site to Tatneft PJSC.
In 2021, around 80% of the company’s passenger car tires were produced in Russia, and the Russia and Asia business segment accounted for around 20% of the group’s net sales.