Nokian Tyres profits fall following Russian output cut

Nokia, Finland – Nokian Tyres plc has reported a decline in 2022 profits, due mainly to Moscow’s war on Ukraine which led to the company’s exit from Russia.

Net sales came in at €1.77 billion, up 3.6% compared to 2021, said Nokian 7 Feb.
With comparable currencies, the figure decreased by 2.2%, it added.

“Segments operating profit” fell 32% to €221.2 million, despite a positive currency impact of approximately €31 million.

The Finnish company reproted a €116.2 million 'operating loss' as opposed to a €268.2 million operating profit posted the year before. This reflected a €337.4 million figure, which was booked as non-IFRS exclusions, following the company's exit from Russia.

Nokian linked the decline in profits to lower passenger car tire supply volumes and changed factory mix due to lower production in Russia.

Nokian initiated a controlled exit from Russia in June last year and announcement an agreement to sell its operations to Tatneft in October.

The tire maker said the sale process is still ongoing, but noted that the transaction is subject to approval by the relevant regulatory authorities in Russia “and other conditions”.

These, it said, create “substantial uncertainties” in terms of the timing, terms & conditions and the closing of the transaction.

Commenting on the results, president and CEO Jukka Moisio said the company showed “exceptional strength and resilience in the midst of the unprecedented events.”

During the year, the tire maker started to build the new Nokian without Russia, increased production in Finland and in the US, and launched high performing new products in core segments.

Furthermore, the company announced plans to build a new production plant in Romania and started collaborating with tire contract manufacturers.

“As we enter 2023, our focus will be on adding new capacity, retaining a competitive premium product portfolio and serving our customers,” Moisio added.

According to the Nokian boss, the first half of the year will be demanding as the company is “lacking supply”.

“But we expect our volumes to start picking up again from the second half of 2023 onwards as we continue to progress our ongoing strategic projects,” he added.

Nokian expects sales to reach €1.3-€1.5 billion in 2023, with a long-term target of achieving €2 billion sales.