Nokian's strong 2023 sets foundation for growth in 2024

NOKIA, Finland—Nokian Tyres P.L.C. reported strong performance for the final quarter of 2023, and expects 'significant growth' in 2024 as it prepares to complete expansion plans.

Segment operating income rose to $35.6 million (€33 million) for the three-month period, up from a loss of $3.3 million reported for the same quarter last year, the tire maker reported Feb. 6. Sales also were up slightly by 1.6 percent year-on-year at $398 million.

For the full year, Nokian more than tripled segment operating profit to $70.4 million, from $18.7 million reported in 2022.

Sales, however, decreased by more than 13 percent to $1.2 billion for the period, including a 4-percent negative impact from currency exchange movements.

Nokian also cited "lower passenger car tire supply volumes, demanding car and tire markets and high inventories in distribution" as factors in the sales decline.

For 2024, Nokian forecast net sales with comparable currencies and segments operating profit "to grow significantly compared to the previous year."

Last year, "we completed our exit from Russia, announced long-term financial targets, and advanced our strategic investments to build up capacity," Jukka Moisio, president and CEO, said in a statement.

The year was marked by "demanding car and tire markets," economic uncertainties, high inflation and low consumer confidence. "Dealers focused on reducing their inventories, resulting in lower replacement tire sell-in," he said.

He added, however, that Nokian improved its "performance and volume delivery towards the end of the year in-line with our expectations." This, he said, "provides us with a solid foundation for 2024 to continue further improving our activities."

Nokian expects to reach "important and exciting milestones" this year, with its net-zero tire plant starting production in Romania and U.S. investment phase being completed.

"Tire sell-in is expected to grow in 2024, and with our increasing capacity and competitive product portfolio, we are ready to seize this opportunity," Moisio said, noting the strong balance will enable the tire maker to achieve its $2.1 billion sales target in the medium term.