Nokian Tyres plc recorded a 22% increase in sales in the first quarter of 2021, and the tiremaker says it expects net sales and segment operating profit to “grow significantly” throughout the year.
Net sales totaled 341.8 million euros, up from 279.8 million euros in the first quarter of 2020. Segment operating profit was 44.3 million euros, up 392% from the 9 million euros in the period a year ago. Gross profit totaled 102.7 million euros, up 34% from 76.4 million euros in 2020.
“Demand for replacement tires has recovered rapidly since the end of 2020. In the first quarter, we reached an all-time high sales volume,” says CEO and President Jukka Moisio.
“Thanks to a great performance by all our business units and business areas, net sales increased by 28.5% with comparable currencies. Segments operating profit grew substantially driven by higher sales volume.
“In passenger car tires, volume growth was particularly strong in Russia as we gained market share especially in summer tires. On the other hand, a weak Russian ruble together with the higher share of Russian volume had a significant negative impact on the average sales price. Heavy Tyres reached an all-time high quarterly net sales and segment operating profit.”
Ramping up production
Nokian says its production output increased by 26% year-over-year. For the first quarter of 2021, 82% of its passenger car tires were manufactured in Russia. Nokian is operating that plant at full capacity “to ensure the availability of our premium products,” says Moisio.
The company notes it is working to recruit additional production staff for both its U.S. and Finnish factories.
“In the U.S. we continue to ramp up production to reach an output of around one million tires in 2021,” Moisio says.
In Finland, the tiremaker is increasing passenger car tire production capacity by 30%.
In the midst of its production notations, Moisio also pointed to the forecast for input costs: “Raw material costs are estimated to increase significantly in the second half of the year compared to 2020.”
