Nokian reports higher sales, profits for first nine months

Nokia, Finland - In contrast to other tyre makers, Nokian Tyres plc has reported higher profits for both the three month period and the nine month period ended 30 Sept, 2006. Sales were also up on the year-ago figures.

For the nine months to September, Nokian reported sales of €534 million, up from €445 million in the first nine months of 2005. Pre-tax profit was €77.8 million, up from €64 million a year earlier. This yields a margin of 14.5 percent, identical to the pre-tax margin a year earlier.

In the three month period, pre-tax profit doubled to €35.8 million, from €16.9 million a year earlier.

In a statement, Kim Gran, President and CEO said, ""The positive trend continued at Nokian Tyres accelerating further in July- September: sales increased, profits improved and market shares of car winter and summer tyres grew significantly. Strong growth continued at Heavy Tyres, and both new and retreaded truck tyres sold better than the year before. Vianor's sales and profit were below targets. Higher raw material costs raised production costs. The average car tyre prices increased in the third quarter as a result of the good sales mix and price increases carried out in September. Inventories and receivables were higher than a year earlier, but they are expected to normalise once the winter season begins in the last quarter of the year.

The corporate statement continued, "Raw material costs (EUR/kg) in manufacturing increased by 12% compared to the corresponding period a year earlier. As a result of the higher raw material costs, the company increased car and heavy tyre prices. Due to the price increases and the good sales mix, the average prices in manufacturing rose approximately 1% on the previous year. Fixed costs amounted to EUR 165.3 million (EUR 146.9 million). Fixed costs represented 31.0% (33.0%) of the net sales.

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Press release (from Nokian