NOKIA, Finland (Aug. 8, 2003) – Nokian Tyres P.L.C. reported increased sales and earnings in its second quarter and half year, and management is positive about the company's goal to exceed last year's results for the entire year.
Operating profit for the half year was $18.6 million, nearly double that of a year ago, while sales rose 9.1 percent to $234.3 million. Sales from Nokian's manufacturing operations increased 17.4 percent, while revenue from the Vianor retailing network edged up 0.4 percent.
Net income for the first half was $9.1 million, up from $1.1 million in last year's corresponding period.
The company sees demand for its products staying strong in its key markets in Scandinavia, Eastern Europe and Russia; on the downside, Nokian predicts raw material prices will continue to rise and the falling value of the U.S. dollar is reducing the profitability of tires shipped to North America.
Capital spending during the period advanced 34 percent, to $23.2 million, as the firm bought new molds and modernized machinery and equipment to eliminate production bottlenecks.
At the same time, Nokian reported production of Nordman-brand winter tires commenced at the Kirov Tyre plant in Kirov, Russia, according to the firm's agreements with Russia's Amtel Holdings. Renovation work at the Voronezh Tyre plant in Voronezh, Russia, progressed and new machinery was installed in anticipation of doing test production this year for the start of full operations in early 2004.
Contract manufacture of Nokian-brand low-speed summer tires in Slovakia and Indonesia and heavy-duty tires in Poland and Hungary increased as planned.