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Nokian Tyres profit tumbles amid Russian exit, shares fall
Global Banking & Finance Review®
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HELSINKI (Reuters) -Finland’s Nokian Tyres on Friday reported a sharp fall in operating profit for the second quarter, sending its shares down 8%, but said it expected the second half of the year to be stronger than the first as winter tyre sales picked up.
HELSINKI (Reuters) -Finland’s Nokian Tyres on Friday reported a sharp fall in operating profit for the second quarter, sending its shares down 8%, but said it expected the second half of the year to be stronger than the first as winter tyre sales picked up.
The company reported a second-quarter operating profit of 9.5 million euros ($10.57 million) compared to a year-earlier profit of 46.9 million euros, adjusted from an initially reported loss due to the impact of its withdrawal from Russia.
The exit from Russia has led to Nokian losing 80% of its annual passenger car tyre production capacity with the company now focused on replacing it by sourcing from China and ramping up production in existing Finnish and U.S. sites.
Nokian in April said it expects the end of the year to be profitable thanks to the winter tyre demand and being able to sell outsourced products.
A Nokian investor relations manager said the company had concluded its withdrawal from Russia in March this year and so no longer included that business in its figures for the first half of 2023 and the comparable period last year.
Quarterly net sales, excluding the impact from the exited Russian business, fell 11.8% to 293 million euros.
“The car and tire market environment is demanding, and during the quarter, we also faced some currency headwinds, impacting our net sales negatively,” Chief Executive Jukka Moisio said in a statement.
($1 = 0.8991 euros)
(Reporting by Essi Lehto; Editing by Niklas Pollard and Jan Harvey)
Operating profit is the profit a company makes from its core business operations, excluding deductions of interest and taxes. It reflects the efficiency of a company's management and its ability to generate profit from operations.
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