Nokian sales drop 8.7% in 2014
Nokian Tyres plc reported a 13.4% increase in net income for the fiscal year ended Dec. 31, 2014, while net sales dropped 8.7% during the same timeframe.
With income of 208.4 million euros and sales of nearly 1.4 billion euros in 2014, Nokian’s income-to-sales ratio for 2014 was 15%. That’s up from 12% in 2013, when income was 183.7 million euros and sales exceeded 1.5 billion euros.
Nokian’s fourth-quarter sales were down 7.7% from 2013, 380 million euros compared to 411.8 million euros for the period a year earlier, while income for that same period rebounded substantially – by more than 237% - to 50.1 million euros.
The company’s financial report noted the difficulties of “geopolitical turmoil” in the economic market.
“The drastic oil price drop combined with further weakening of Russian and CIS currencies and economies had a negative impact on our sales and thus on our financial performance,” said Ari Lehtoranta, CEO and president of Nokian. “Our teams, however, were able to strengthen our market position in all markets and continue to improve our operational efficiency. This together with higher than estimated material cost reductions helped us to deliver good financial results. I am especially happy for the record strong cash flow.”
Nokian recorded 458.3 million euros in cash flow, up 40.8% from 325.6 million euros in 2013.
“Currency rate changes cut our full year net sales directly by 99.9 million euros, which together with the product mix change and price pressure caused our operating profit to drop by 3.1 percentage points,” Lehtoranta said. “Thanks to the declining raw material cost, improved productivity and running a tight ship, our profitability remained on a good 22% EBIT level.
“Even if the market development visibility in Russia and CIS (Commonwealth of Independent States) is very poor at the moment, we remain confident about our future. We start 2015 with a strong balance sheet, better than ever product range, constantly expanding distribution and a well performing organization.”