NOKIA, Finland (Aug. 5, 2011)—Nokian Tyres P.L.C.'s operating earnings jumped 53.3 percent in the quarter ended June 30 as sales rose 30.1 percent.
Operating income rose to $134.2 million on sales of $351 million. Net profit was $106.8 million, or nearly 22 percent of sales.
For the first half, operating income doubled to $238.3 million and sales climbed 41.4 percent to $903.6 million. Net income was up 88.1 percent to $196.6 million.
The strong first half, coupled with a healthy order book, expanding distribution channel, improved cost structure, etc., “will give Nokian Tyres a good chance to strengthen its market leadership in the core markets and to continue strong profitable growth in 2011,” the company said.
Nokian's tonnage output increased by 53 percent in the half, but it wasn't enough to satisfy rising demand for the firm's products, Nokian President and CEO Kim Gran said—a situation the firm hopes to rectify with new capacity being built in Russia and increased shift work in Finland.
Sales in Russia and the former Russian satellite countries nearly doubled in the period, while sales in North America jumped 33.8 percent, Nokian said.
Sales of passenger tires were up 47 percent, while sales of heavy tires increased 52.8 percent. Sales by the firm's Vianor retailing network were unchanged.
Raw material costs increased in the review period by 35.8 percent, and the firm said it feels materials prices have begun to stabilize. Nonetheless prices will continue to rise in the second half, Nokian said, putting pressure on tire prices.