Nokian Tyres: Net sales and profit up in Q1 2017
Net sales were up at Nokian Tyres in the first quarter of 2017 as was, despite increased raw material costs, net profit. Andrei Pantioukhov, the tyre maker’s interim president and chief executive officer, declared that Nokian Tyres “had a strong start of the year” and “demonstrated strong performance in all our main market areas.”
At €325.9 million, net sales were up 18.2 per cent year-on-year during the three months to 31 March. Operating profit was up 16.6 per cent to €58.9 million, however the operating margin decreased from 18.3 per cent to 18.1 per cent. Net profit for the quarter was €45.3 million, up 13.6 per cent on the previous year’s result.
“The first quarter was positive in many aspects,” commented Pantioukhov. “Sales in all our main markets increased compared to the same period in the previous year. All our main market areas reached growth and Russia became the biggest contributor to this growth, like in Q4/2016.”
Nokian Tyres’ net sales in the Russia/CIS region grew 56.1 per cent year-on-year, making it the tyre maker’s second largest region in terms of sales after the Nordic countries. Sales there accounted for 25.7 per cent of Nokian’s total global net sales, up from 19.1 per cent a year earlier. Sales within the region are being boosted by growth in the Russian economy after seven consecutive quarters of recession, however Nokian Tyres expects the pace of recovery in the Russian market to be “quite moderate.”
All regions where Nokian Tyres is active experience a rise in net sales. Growth in the Nordic countries was a modest 5.0 per cent, and the region’s share of total sales declined from 40.8 per cent to 35.8 per cent. The rest of Europe accounted for 25.3 per cent of total sales, with net sales rising 18.5 per cent year-on-year. North America is still the Finnish tyre maker’s smallest region, and although net sales there rose 9.4 per cent in the first quarter of the year, the market’s share of total net sales declined from 13.9 per cent to 12.6 per cent.